Blackstone's $14 billion acquisition of GE's real estate holdings highlights again the concentration of institutional property assets among a relative handful of global private equity players, who mostly trade among themselves, driving up prices. It also points to how the success of these once swashbuckling opportunity investors has pushed them into acquiring vast portfolios of more core-like holdings well into the later stages of the current real estate cycle.

Credit these major brand-name private equity firms for buying low and selling high in the last cycle, and setting their marker as savvy investment partners for pension funds and other institutions. In the new cycle, the money has poured into these deal-making firms as plan sponsors gravitate to “safe” choices. They made some nice transaction bets early on in the 2009-2010 period and the capital flows have only intensified—their next generation funds just vacuum up billions of dollars in commitments from institutions desperate for yield. For Blackstone it's no problem plunking down $14 billion to GE or a relatively paltry $1.3 billion for the Willis Tower in Chicago. They are swimming in cash.

But the Blackstones of the world are no longer just in the opportunistic game of buying, riding the market up, and selling. Their investor-partners want their money invested as soon as possible—no matter the stage of the cycle. Past performance may not guarantee future success, but that's what pension funds are counting on and it does no good for them to have their commitments go un-invested. Once all this money is pushed out, the private equity behemoths must digest what they bought and figure out how to manage global portfolios worth many tens of billions of dollars, using rapidly expanding in-house asset management teams as well as relying on networks of local brokers and advisors. It's a whole different game to own and manage, rather than own to sell as quickly as possible. And just the sheer volume of assets now owned makes it extremely difficult to unload lumpy portfolios in the event of looming market reversals. These deal making companies could be more vulnerable to performance setbacks when the current buying spiral ends and meeting performance targets will be more difficult.