Ultra-high-net-worth families are making significant changes to their real estate holdings as higher interest rates persist, according to a new survey of single and multi-family offices worldwide. More than half of respondents have recently adjusted their property allocations, signaling a clear pivot in how institutional family capital approaches real assets. The survey, reported by IPE Real Assets, captures a moment of strategic reassessment across the global family office community, with traditional sector preferences giving way to more nuanced, income-focused positioning.
The most visible trend is a moderate net reduction in exposure to core office and retail properties. Family offices are pulling back from these legacy sectors as structural headwinds—remote work, e-commerce penetration and changing consumer behavior—compound the pressure from higher financing costs. The shift is not a wholesale retreat from commercial real estate, but rather a deliberate rebalancing toward property types that offer stronger occupancy fundamentals and resilient demand profiles in a higher-rate environment.
Residential real estate, logistics and a suite of alternative property sectors are the primary beneficiaries of this reallocation. Student housing and healthcare properties are drawing particular interest, as families seek assets with inflation-linked income streams and demographic tailwinds. These sectors offer the combination of operational complexity that suits patient, strategic capital and yield characteristics that align with the income objectives many families are emphasizing as traditional bond yields have risen.
A significant share of survey participants plan to increase direct and club-style real estate investments over the next twelve months. The rationale centers on lower fees, better governance and the ability to tailor leverage to family-specific risk appetites. By moving away from commingled fund structures and toward proprietary or co-investment platforms, family offices are asserting greater control over asset selection, financing terms and exit timing—advantages that become more valuable when market volatility is elevated and liquidity is uneven.
The survey also reveals a shift in how families are treating real estate within their broader portfolios. Rather than managing property as a tactical sleeve or opportunistic allocation, more offices are integrating real estate explicitly into long-term strategic asset allocation models. This evolution reflects a maturation of family office investment frameworks, with real estate now viewed as a permanent, multi-generational portfolio anchor rather than a cyclical return driver. The result is longer investment horizons and a willingness to weather short-term valuation volatility in pursuit of compounding income and appreciation.
Beyond property itself, some family offices are boosting allocations to non-real-estate alternatives such as private credit. This diversification within the alternatives bucket is intended to complement property income, offering floating-rate exposure and shorter duration profiles that can hedge against further rate increases. The interplay between real estate and private credit illustrates a broader evolution toward real-asset and income-focused strategies among ultra-high-net-worth families, driven by both yield considerations and the desire for portfolio resilience in uncertain macro conditions.
Despite the tactical shifts and sector rotation, the survey underscores that real estate remains a core allocation for the family office community. The asset class continues to offer the combination of income, inflation protection and portfolio diversification that aligns with the multi-decade time horizons and capital preservation mandates of UHNW families. What has changed is the level of selectivity and the emphasis on structure-driven execution, as families apply more disciplined underwriting and seek alignment between property fundamentals and long-term strategic objectives.
The findings capture a family office real estate landscape in transition. Higher interest rates have served as both a catalyst for portfolio review and a filter for sector selection, separating property types with genuine operational strength from those reliant on cheap financing and cap-rate compression. As families lengthen horizons, deepen their operational engagement through direct investing and integrate real estate more formally into strategic models, the asset class is being redefined—not abandoned—within the ultra-high-net-worth portfolio. The shift toward residential, logistics and alternative sectors, combined with greater structural control, suggests that family office real estate capital is becoming more sophisticated, more selective and more aligned with the enduring advantages the asset class can deliver.