Private Equity Leads REITs

However, pure real estate deals are harder to land and often involve consortiums to spread the risk, Kravit said. Blackacre has recently looked at a couple of very large pure real estate deals, but the $5 billion to $8 billion equity commitments would've been difficult to pull together, he said.

But Kravit admitted that the line of money ready to invest in real estate on the private equity side won't dwindle, unless there's a huge event like a major terrorist attack or war. "As long as there's cheap debt available, that's what's going to drive the privatization," he said.

Several investment bankers said that the high prices of REIT stocks continue to stifle the privatization deals of late. But what could possibly help the deal flow is the fact that a lot of REIT management teams fear a 20 to 30% selloff in REIT stock prices this year, and they don't feel like riding out another down cycle in real estate, one banker told TheStreet.com. This could motivate some REITs to cash in on the good times now and take their companies private, the banker said.

Echoing this sentiment was Jeffrey Kelter, the former CEO of Keystone Property Trust, a formerly public REIT that was bought by ProLogis (PLD) in 2004. He told the audience that every REIT chief executive may consider himself to be a genius, but at the same time is wondering how his stock has managed to jump so high in price.

Mills Fate in Focus

A list of rumored buyers for troubled mall developer Mills Corp.(MLS) were at the NYU conference, but lips remained sealed.

Vornado Realty (VNO) CEO Steve Roth told TheStreet.com he wouldn't comment on Mills or Vornado's possible interest in the company's Meadowlands Xanadu project in New Jersey.

When asked about his interest in Mills, Simon Property Group (SPG) CEO David Simon told TheStreet.com: "It is a very complex situation. We continue to monitor it and look at things. They have some good assets. We could manage a Mills property."

Directors from ING Clarion, Blackacre/Cerberus and Blackstone all declined to comment on whether their firms were interested in Mills.

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