A string of eleventh-hour REIT deals unfolded late last year that helped solidify 2006's moniker, "The Year of the Deal."

The effects of these developments on the industry were a frequent topic of discussion during NAREIT's Annual Convention in November.

"The nature of the deals has changed dramatically," says Christopher J. Niehaus, managing director and head of Morgan Stanley's North American Real Estate Group. "Right now, private capital and privatizations are dominating the industry."

The Blackstone Group has been a recurring name in many of these deals. In 2006, the private equity firm snapped up MeriStar Hospitality Corporation, CarrAmerica Realty Corporation and Trizec Properties, Inc. Its most recently announced deal, the $36 billion proposed acquisition of Equity Office Properties Trust (NYSE: EOP), is pending.

Frank Cohen, Blackstone's managing director of real estate, remarked on the transaction trend. "We've been pretty active in the real estate private equity sector for a number of years now," he says. "Over the last three or four years, we've completed 12 or 13 public to private transactions. It seems to me that the privatizations have happened in waves. The first wave was hotels following 9/11, and the next wave was apartments due to the condo boom. Now the current wave seems to be office."

Not all activity has been privatization—some transactions have been public to public deals. Commenting on the recent acquisitions of Pan Pacific Retail Properties by a joint venture of Kimco Realty Corporation (NYSE: KIM) and Prudential Real Estate Investors, Pan Pacific Chairman, President and CEO Stuart A. Tanz says, "from my standpoint and that of the management team and board, we recognized that we had the ability to sell the company at the highest valuation that has been seen in strip centers."

Gerard Sweeney is the president and CEO of Brandywine Realty Trust (NYSE: BDN), which acquired Prentiss Properties Trust in another public to public transaction in 2006. Sweeney says there are pros to staying public. "One of the magical things of the public marketplace is the ability to seek out capital. We have a number of joint ventures now, and we can certainly look forward to growing our market positions."