It's no secret that private equity firms are looking to diversify beyond leveraged buyouts. This push is taking place even though the deal environment isn't nearly as bad it was few years ago. The strategic view seems to be that the industry needs long-term alternative revenue streams, as the Golden Era of financial deals ended with the financial crisis. At least one bank, Bank of America, will exit the business all together; it has announced plans to spin off its private equity firm, BAML Capital Partners.

In the meantime, other private equity firms have started pushing deeper into real estate, Bloomberg reports. Blackstone Group is aiming to raise a new $10 billion real estate fund this year, while Carlyle is raising a new fund aimed at U.S. properties.

According to Preqin, 439 private equity real estate funds are now seeking $160 billion, the largest number it has ever recorded.

They may be timing the market just about right. The distress is still obvious, but the commercial real estate market seems to be bottoming out finally.

The big private equity firms seem to have digested the losses and are willing to strike out anew with revamped efforts. The biggest competition may come from REITs, which drew $47.5 billion in capital in 2010. That's close to the record of $49 billion, achieved in 2006.

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