Key Takeaways
- • Global private real estate fundraising slowed sharply in Q1 2026, with capital raised falling to $43.96 billion from $90.25 billion in Q1 2025, according to PERE, a comparison inflated by two mega-fund closes totalling $35 billion.
- • Value-add vehicles captured 56% of total capital raised in Q1 2026, and seven of the 10 largest funds closed in the quarter pursued a value-add strategy.
- • The OECD estimates around 90% of European commercial real estate asset managers expect at least 20% of their portfolios to become stranded within three years, largely due to inadequate energy performance.
- • Yardi–Mingtiandi survey data from August 2025 shows 52% of Asia Pacific real estate firms report measurable efficiency gains from AI, and 36% say it is improving strategic decision-making.
- • FTI Consulting and Yardi frame 'operational alpha' as the key performance driver, examining decisions for CIOs, COOs, CFOs and CTOs over the next six months.
Summary
Real estate private equity is facing what the authors describe as the most difficult market in a generation. According to PERE, global private real estate fundraising lost momentum in early 2026, with first-quarter capital raised falling to $43.96 billion from $90.25 billion in the same period of 2025. The year-earlier figure was unusually elevated by two mega-fund closes totalling $35 billion. The report attributes the slowdown to geopolitical instability, an elevated cost of capital, funds trapped in transition assets, disruption to property economics and shifting demographics.
The OECD's Future-Proofing Real Estate Investments report is cited as evidence of structural pressure on asset values. Across Europe, around 90% of commercial real estate asset managers expect at least 20% of their portfolios to become stranded within three years, driven largely by inadequate energy performance. In Asia Pacific, 60% of studied assets are projected to become economically non-viable by 2030, rising to near-total portfolio exposure by 2050. North America is already showing stranding risk, which the report presents as a current condition rather than a future scenario.
Against this backdrop, capital is shifting toward execution-focused strategies. PERE data shows value-add vehicles captured 56% of total capital raised in the first quarter of 2026, and seven of the 10 largest funds closed in the quarter had a value-add strategy. The report defines 'operational alpha' as value created through how assets are managed, optimised and repositioned.
Artificial intelligence is presented as an accelerant. Yardi–Mingtiandi survey data from August 2025 finds 52% of Asia Pacific real estate firms already report measurable efficiency gains from AI, while 36% say it is improving strategic decision-making. The report, jointly prepared by Bernie Devine of Yardi Asia Pacific and Alexander Marx of FTI Consulting, examines the choices facing chief investment, operating, financial and technology officers over the next six months. The authors state the piece is a practical examination rather than speculation about AI's potential.
The OECD's Future-Proofing Real Estate Investments report is cited as evidence of structural pressure on asset values. Across Europe, around 90% of commercial real estate asset managers expect at least 20% of their portfolios to become stranded within three years, driven largely by inadequate energy performance. In Asia Pacific, 60% of studied assets are projected to become economically non-viable by 2030, rising to near-total portfolio exposure by 2050. North America is already showing stranding risk, which the report presents as a current condition rather than a future scenario.
Against this backdrop, capital is shifting toward execution-focused strategies. PERE data shows value-add vehicles captured 56% of total capital raised in the first quarter of 2026, and seven of the 10 largest funds closed in the quarter had a value-add strategy. The report defines 'operational alpha' as value created through how assets are managed, optimised and repositioned.
Artificial intelligence is presented as an accelerant. Yardi–Mingtiandi survey data from August 2025 finds 52% of Asia Pacific real estate firms already report measurable efficiency gains from AI, while 36% say it is improving strategic decision-making. The report, jointly prepared by Bernie Devine of Yardi Asia Pacific and Alexander Marx of FTI Consulting, examines the choices facing chief investment, operating, financial and technology officers over the next six months. The authors state the piece is a practical examination rather than speculation about AI's potential.
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