"The secondary market for real estate partnership interests is likely to explode over the next 24 months, much the way it has for other types of private equity," says Berman. "While institutional investors have many liquidity options for secondary sales of their other private equity interests, they currently have very few options for their private real estate fund investments. We formed Liquid Realty Partners to serve this growing marketplace need."

Liquid Realty will provide an early liquidity option to institutional investors, including banks, pension funds, insurance companies and trusts, as well as individuals seeking to exit passive, illiquid real estate fund and partnership holdings. The company is currently acquiring portfolios from $2 to $250 million, and is in talks with institutions regarding the acquisition of two significant pools of opportunistic real estate fund interests.

"Many of the institutional investors who are new to the real estate asset class will likely reevaluate their commitments in light of capital market, regulatory and other pressures," says Scott Landress, co-general partner of Liquid Realty, "and some will seek to divest specific holdings that hold little prospect of meeting return expectations. LRP has the expertise to price these assets quickly and fairly, so sellers can efficiently redeploy the capital for other uses."