Second in a four-part series on European Investment Issues.

A rush of capital chasing too few deals and the race to place at least a portion of that capital in alternative investments--all set against the backdrop of the Incredible Disappearing Cap-Rate Environment. Sound familiar? It should. Stateside investors have been juggling these forces for some time now with varying degrees of success, some striking it big, some coming up empty-handed in the great trophy grab. The difference is that we're not discussing the states here, but the pan-European investment scene, awash in capital and expected to gain yet more as the ground rules for placing funds undergo a dramatic shift. In an exclusive interview at Mipim in Cannes last month, Gordon C. Black, managing director of international private equity for Heitman Real Estate Investment Management in London, talked about the shifting dynamics of European commercial real estate and how Heitman plans to harness them.

GlobeSt.com: It was an explosive '05. What does the investment pipeline look like today?

Black: The latest numbers I heard were about 130 billion euros of transactions in 2005, and that number is up anywhere from 30% to 50% over the past three to five years on average, with a lot of institutional and retail interest. Going forward you'll see more monetization and privatization of corporate and user-held real estate, as we started to see in 2005. In all, the money that's been allocated to real estate is just growing and it needs to find a home.