Private investors lead global CRE buying spree, again

Private capital has decisively reasserted dominance in global commercial real estate investment, with private investors—including family offices, high-net-worth individuals, and smaller equity funds—driving 59% of deal activity in the first nine months of 2025. This represents a marked shift from the institutional-led markets of previous decades, reflecting both the structural constraints faced by larger institutional investors and the tactical advantages private buyers enjoy in the current interest rate environment. Private investors have capitalized on lower borrowing costs and improved yield opportunities, filling the vacuum left by institutional capital withdrawal following the Federal Reserve's rate-hiking cycle that began in 2022.

Family offices have quietly become dominant CRE buyers on the global stage, according to recent data tracking private office allocations and market pricing behavior. These vehicles have systematically scaled their real estate commitments and are materially reshaping valuation benchmarks across major office markets. Their growing presence reflects both generational wealth reallocation toward real assets and the operational flexibility that family office structures provide for patient, long-duration capital deployment.

Institutional investor activity, while still secondary to private capital, shows clear signs of market reentry. Institutions raised $121 billion in 2025, marking a 33% increase from the prior year and reversing multi-year fundraising weakness. This rebound, coupled with the NCREIF Total Returns Index turning positive, indicates renewed confidence among traditional CRE investors preparing for broader market participation. Transaction velocity for larger properties—those valued above $2.5 million—accelerated 17% year-over-year through the third quarter of 2025, demonstrating that both cohorts of capital are gradually increasing deployment velocity as market conditions stabilize.

Sector fundamentals remain generally supportive across core property types. Office space achieved 85 million square feet of net absorption in 2025, indicating sustained underlying demand despite well-publicized hybrid work pressures. Retail demand, which softened in 2025, is expected to strengthen in 2026, with developers increasingly concentrating new supply in single-tenant formats rather than larger traditional centers. Industrial and multifamily sectors continue to show steady or improving fundamentals, providing investors with diversified deployment options across the broader CRE landscape.