The Blackstone Group’s $39 billion purchase of Equity Office Properties in February included more than 10 million square feet of signature office space in Greater Boston. Center Plaza in Boston’s Government Center, above, was among the buildings in that portfolio.

No deal is too big.

That’s the finding of a survey that said 10 years of cautious optimism has given way to exuberance as plentiful capital has fed an unquenchable demand for commercial real estate.

The survey, conducted by global law firm DLA Piper, measured the perspectives of 274 top real estate executives. Nearly 80 percent of respondents described their one-year outlook for the U.S. commercial real estate industry as “bullish,” up from 43 percent in 2005. Nearly half of those surveyed cited the continued growth of the U.S. economy as the primary reason for their confidence.

In its “State of the Market” Real Estate Survey, industry executives cited as an example The Blackstone Group’s $39 billion purchase of Equity Office Properties, the nation’s largest private real estate sale of all time. That transaction in February defined the U.S. commercial real estate market for the last few years, according to the study.

The Blackstone purchase included more than 10 million square feet of signature office space in Greater Boston. Among the local properties involved were Center Plaza in Boston’s Government Center, Rowes Wharf, Russia Wharf and 60 State St., as well as the Wellesley Office Park and the New England Executive Park in Burlington.

While 52 percent of the executives surveyed said continued consolidation will create opportunities for purchases, 19 percent said it will lessen chances to buy because only companies with billions to invest can afford today’s prices.

Respondents were asked to share their thoughts on the following question: On the heels of the Blackstone/Equity Office transaction, what impact do you believe the public-to-private merger-and-acquisition trend will have on the real estate market this year?

“Rents being set by ‘inflated’ property values are not sustainable. It reminds me of the tech bubble,” said one executive. “Someone will get caught overpaying on these assets,” said another. “Upward pressure on prices will make new construction more competitive, leading to excessive development, higher vacancies and the next down cycle,” said a third respondent. “It will embolden the lending market to bear more risk and increase development/construction financing,” yet another executive added.

Nine out of 10 respondents said they expect the public-to-private mergers-and-acquisitions trend will continue in the coming year. When asked the reasons for this continued movement, respondents cited a confluence of key factors driving the record number of public-to-private deals, led by private equity funds willing to pay a premium for real estate assets, cheap rates in the debt market and the public markets undervaluing real estate investment trusts.

“The growing influence of private equity capital in the real estate markets is unmistakable, yet the overwhelming spike in optimism throughout the industry is surprising at a time when some industry experts fear that pricing may have peaked and there is also new evidence of a slowdown in the U.S. economy,” said Jay A. Epstien, chairman of DLA Piper’s U.S. real estate practice group. “It is also interesting to note that the majority of executives believe the public-to-private consolidation trend, which has been dominated by many of the largest players in the industry, will create an abundance of opportunities for the smaller players, not just the large investors.”

Among commercial sectors, 38 percent of the respondents said the downtown office markets present the most attractive prospect for investors this year. Retail and hotels offer the least attractive opportunities, according to 5 percent of the executives. Given the dramatic downturn in the nation’s housing sector, one-third of the respondents said the multifamily market is the weakest investment this year.

Surprising Conclusions
The survey captured a number of other surprising conclusions throughout the industry, including:

• Despite the greatest capitalization rate compression in the history of the U.S. commercial real estate industry, 10 percent of respondents believe cap rates will dip further into historic lows while 72 percent do not expect any significant changes.

• Perhaps as a direct consequence of the slowdown in the single-family residential housing market and the subprime lending situation, 26 percent of survey respondents chose multifamily over other investment options.

• There is lower-than-expected investor interest in Eastern Europe and Russia at a time when many U.S. investors are active in those markets.

• Survey respondents recognize that a confluence of key factors is driving the record number of public-to-private deals, including private equity funds willing to pay a premium for real estate assets, cheap rates in the debt market and the public markets that are undervaluing REITs.

• Nearly half of respondents (44 percent) expect the public-to-private merger-and-acquisition trend will create more opportunities for companies other than the “large” players.

• China and India ranked as the most attractive markets outside the United States for international investment, trailed slightly by both Eastern Europe and Western Europe.

• Respondents expect private equity, pension funds and foreign investors to be the most active real estate investors in the U.S. during the coming year.

DLA Piper’s findings contrasted with those in a study by the Urban Land Institute, a Washington-based nonprofit planning and research group, and PricewaterhouseCoopers. That survey of industry executives indicated the commercial real estate cycle has peaked and will begin pulling back in 2007.

The ULI survey also suggests that commercial real estate is showing signs of a return to normal as an income-producing investment rather than a rapidly appreciating asset class. The easy lending of the past few is expected to tighten because of worries about the economy, surveyed executives said. Investors will have to turn to asset management and operating performance to raise returns as investment inflows slow because of lower return expectations, respondents added.