SOURCE: The New York Times

Big investors are hungry for higher yields and hoping for a repeat of 2006's stellar returns. Seasoned money managers were caught off-guard with the rally in real estate funds.

The mounting appetite for commercial real estate from institutions like pension and private equity funds, as well as real estate investment trusts, have continued the long rally in real estate funds. Unlike residential real estate where the unsold inventory has been mounting, there is a limited supply of commercial buildings.

Big investors are pumping capital into dividend-paying REITs and have privately acquired entire portfolios of office buildings and other commercial property.

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SOURCE: Investment News

Due to loss of returns, investors are letting go mutual funds that invest in real estate investment trusts.

Financial advisers believe now is not the time to pull out of the holdings, however commercial real estate investors and even some advisers do not agree.

In the latest data available, year to date through October, monthly shows outflows are taking their toll. Investors pulled out $431 million dollars out of the category than they put in. This trend followed outflows of $1.48 billion in August, $2.35 billion in July and $1.92 billion in May.

This trend is expected to continue the category in 2008.

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SOURCE: Reuters

Big players on Wall Street are expected to lose money because of subprime related securities.

Even with subprime defaults rising throughout 2007, Wall Street's biggest investment banks convinced investors that their exposure to risky loans was limited.

Some of the architects of both the residential and commercial mortgage crisis now face mega-write-downs, net losses and more high-profile ousters of top executives.

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SOURCE: CNN Money

Sale-leasebacks are an innovative way for business owners to gain cash and leasing may have tax advantages too.

With the current residential mortgage slump, now might be the time to think about investing in the commercial real estate market. Creative financing helps both the small businessman and the new building owner.

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