Even amid a global economic and financial crisis, institutional investors who know where to look will find a few opportunistic gems, according to a new study by LaSalle Investment Management.

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With $50 billion of assets under management for institutional investors, the Chicago-based firm points to at least four key investment opportunity plays this year: REIT shares and units in limited partnership funds trading at steep discounts;?non-performing loans or pools of partially performing loans; and defaulted land or development deals in need of recapitalization, priced so investors get incomplete improvements at almost no cost.

“Markets experiencing a generational correction offer as many opportunities as threats,” says Jacques Gordon, global strategist at LaSalle Investment Management, an independent unit of Jones Lang LaSalle. “For investors with capital and the confidence to look through the downturn, 2009 will provide some fantastic opportunities.”

Gordon and co-author Robin Goodchild, LaSalle's head of European research and strategy, directed the study, which is a culmination of interviews with its own research professionals and fund managers globally.

“We continue to believe that a disciplined investment process and an explicit strategy are the best ways to approach large, complex and chaotic markets,” says Goodchild. “This is especially true during periods of great volatility.”

Over the next two years, LaSalle says investors must first protect their income streams. It's incumbent on investors to aggressively manage their portfolios, work with tenants on early renewals, and adjust rents quickly.

Investors should also look to more recession-resistant opportunities, including multifamily, healthcare and grocery- and drug-anchored retail centers, so-called “necessity retail” properties.

For now, the bulk of institutional money remains on the sidelines as these conservative investors are rarely on the bleeding edge of opportunistic buying. Still, some investors are stepping up.

In October, LaSalle Investment Management closed on the $157.8 million purchase of the World Trade Center in Denver on behalf of an institutional client. The sale became the largest office transaction in the city for 2008. LaSalle bought the property from Transwestern Investment Co., which paid an estimated $116 million for it in early 2006.

Late last year, the Ohio Public Employees' Retirement System agreed to commit $387 million to U.S. real estate investments, while it plans to sell some $574 million worth of properties. On the opportunity front, the pension fund plans to commit $250 million to international real estate investment trusts based outside the U.S. in 2009.

Meanwhile, the State Universities Retirement System of Illinois is committing $40 million to its first real estate opportunity venture with Dune Capital Management, run by former Goldman Sachs real estate head Dan Neidich. To date, Dune has raised $1.5 billion to invest in all property types globally.

Other institutional investors will be challenged to boost real estate allocations, which historically averaged 6% to 8% of total assets before rising in recent years to a range of 8% to 12%. The Ohio Police and Fire Pension Fund had planned to invest $400 million in real estate over the next few years, but pared back that volume to $50 million in light of losses in other investments.

Recently the Iowa Public Employees' Retirement System, which has a real estate portfolio of nearly $2 billion, said it is putting the brakes on any new commercial real estate investments this year.