Where's the private equity money?

According to this nicely-done New York Times post, not in real estate:

Private equity real estate fund-raising fell in the second quarter to its lowest level since 2004, suggesting that a recovery has yet to take root in the investment property market.

For years you kept hearing about everyone having "dry powder" but not using it.  Is that like the Mutual Assured Destruction theory of the Cold War?  I think the story correctly states that many lenders are wary to lend money to PE-backed concerns.  But it could also be --as the piece correctly mentioned -- that these entities raised a lot of money in past years, are looking for the right deals carefully and slowly; so looking for more cash right now when you are not deploying what you have is not necessarily a good thing. The deals I know about are often all-cash ones, perhaps or perhaps not levered after closing.  That just makes a take-down of the dirt so much easier when you can do that.

The piece also talks about an expectation of continued choppy prices -- you can expect that when volume is still low.  For all the talk in the market of recovery I'm still unconvinced it is robust and sustainable.  Of course I want to be wrong. 

As the story says, right now it is all about the lending.  The PE folks make their money when they can deliver big IRRs, and high interest rates and low LTVs don't help on the big returns unless the purchase price is THAT good.  (And that is not common.)  Yes, there is a little life in CMBS and the life guys are kicking in and reeling in some deals, but without liquidity of a type we saw, say, perhaps 9 or 10 years ago, we may not have a very robust recovery in our part of the market, at least not for the PE guys.