“So riskier investments are coming back,” White declared. “Meanwhile, industrial has been a laggard. Prices are up about 8% over last year, that's about 17% off peak. Apartments are at peak, CBDs are at or above peak and suburban markets are about 30% off.

“Things that were close to the top of value and considered risk averse have peaked and those that were farther from peak are heading to that level,” he noted. “That's a sea change, that investors are embracing risk. Before, all we heard was 'core market' and 'buy risk averse.' ”

White had other surprises to report. “We're seeing suburban office outperform CBDs for the first time and unanchored shopping centers are up 12% in price; that's strong.”

In terms of investor type, those leading the pack and those falling behind were literally all over the map, he said. “Private investors have returned, they tend to be able to smell the opportunities first. They were the most impacted by the credit crunch so now that it's easier to finance properties, they're back in the market. We're also seeing the '1031 market' kick in. Public REITs should be bigger buyers than they've been. We are seeing some IPOs that could be game changers, whether it's the Empire State Building or Blackstone throwing out Brixmor, La Quinta or Hilton. It all will happen in the next six months, and those are just the ones we know about, so keep your eyes on the sector.” Of institutions, he said, “they're deploying the most capital. Some of them reported record fund-raising levels in the second quarter, so the inflow is good.”

Less surprising, perhaps, but worth noting, is the strong performance of the U.S. against the rest of the world. “The US looks like a bastion of stability compared to Europe and Asia,” White asserted. “And we're seeing a lot of foreign capital flows. Australia is coming in as well as new markets from Asia, including Korea, Malaysia, China and Hong Kong.”

Market by market, in terms of pricing, he reports, "The Northeast has been the sterllar performer, with Manhattan and Washington DC driving the recovery. The West Coast was lagging, with Southern California and Las Vegas dragging the region down. The story of the day is the Southwest, with Phoenix' recovery, and I think a big story is the Southeast, where parts of Florida are rebounding and Atlanta has finally popped through. The Midwest has lagged but Chicago has done ok."

In terms of cap rates, said IRR's Ray Cirz, chairman, the lowest numbers were achieved by New York, San Francisco, which both saw 5%; and Boston, which came in at 5.25%. Washington DC fell off of the list because of the sequestration. “There's concern there for investors, though not to a great degree.”

The markets with the highest rates, according to IRR's research, were Detroit, 10.25%; Cleveland, 9.25%; and San Antonio, 9%. The rationale for these markets' concerning performance is clear, said Cirz. “It goes back to job growth. There was a lot of hesitance to invest in Detroit but we feel the bankruptcy actually might have a positive influence going forward. The CBD market doesn't have much class A product, but the suburbs are doing well.”

Cirz made a number of predictions. “Treasury rates are likely to increase further, putting more pressure on financing rates and, in return, cap rates. Supply and demand is still weak, and without an improving economy, office absorption will remain tepid. With weak fundamentals, rent levels will not experience significant increases. Rising cap rates and weak rental growth will lead values to stagnate or even go down in certain markets.”

And of specific markets, he said, “San Francisco is doing well with high-tech employment, and Seattle also reports a lot of demand. Vegas, Cleveland and Detroit are concerned about job growth.”