During the second half of 2007, a group of investors — including opportunity funds, hedge funds and a few sophisticated debt investors — used credit default swaps against single name CMBS and the CMBX indices to completely reprice the cost of real estate debt and equity. Today, similar investors are pushing down the price of property derivatives traded against the NCREIF Property Index (NPI). Earlier in 2007, large institutional investors in the United Kingdom foresaw a combination of factors — extremely low cap rates in a rising interest rate environment and moderating demand for space united with growing levels of construction and properties that were still a couple years from delivery. They concluded prices were too high, so they shorted the IPD index to the tune of a couple billion pounds. The end result of these bets was to help push U.K. IPD returns negative in the second half of 2007, even though occupancy was strong and rental rates were still climbing. The positions t