When Real Estate Research Corporation (RERC), Deloitte, and Real Capital Analytics (RCA) first discussed partnering together to publish this forecast report, a distinct sense of uncertainty about the economy, about the capital markets, and about commercial real estate dominated our conversation. Our unease was understandable we were barely out of the longest and most severe recession since the Great Depression, the level of U.S. debt was reaching epic proportions, and the number of new bank failures attributed to their exposure to bad commercial real estate loans was increasing weekly.

It seemed that the investment environment was finally starting to turn around when a new Congress came to town and tax cuts were
extended for businesses and individuals. We were thrilled when the stock market finally began to grow by leaps and bounds, and even more thrilled when institutional real estate returns increased to approximately 13 percent in fourth quarter 2010, according to the National Council of Real Estate Investment Fiduciaries (NCREIF)....