Real estate private equity funds — which have become a dominant force within the commercial real estate world — may have pulled back a bit because of the credit crunch, but many view the current market conditions as ripe with opportunity, according to New York City-based Ernst & Young's fourth annual survey of the sector.

More than 285 funds — which raised $23.5 billion during the first six months of 2007 and a cumulative $229 billion since 1990 — participated in the survey. Those same funds have another $35 billion in planned funds. That means all told that the funds may actually raise more money in 2007 than they did in all of 2006 — $38.7 billion — in spite of issues in the capital markets.

“This summer's correction in the credit markets has significantly tightened lending activity and slowed transaction velocity,” Gary Koster, Americas leader for Ernst & Young Real Estate Fund Services, said in a statement. “While this provides some challenges for sponsors in financing transactions, it also provides a window of opportunity for them to use their existing capital to exploit pricing opportunities created by market uncertainty.”