Survey findings detail a rising target allocation to real estate overall among family offices, with a pronounced preference for direct ownership structures and joint-venture arrangements rather than blind-pool commingled funds. The data underscores families' desire for greater control and transparency in property investments, enabling them to align holdings with long-term wealth-preservation objectives and intergenerational planning horizons.
Several European and Middle Eastern family principals interviewed for the research describe deliberately increasing their exposure to multifamily, student housing, and senior living assets. These living-sector holdings are positioned to capture sustained demand driven by aging populations, urbanization patterns, and shifting household formation trends. Families view the recurring, necessity-based income streams from residential and age-restricted properties as a natural complement to more volatile equity and private credit allocations.
Logistics and urban infill industrial assets have emerged as a second pillar of the reallocation strategy. Family offices characterize these properties as resilient cash-flow generators that benefit from structural tailwinds in e-commerce fulfillment and last-mile distribution networks. The operational stability and inflation-hedging characteristics of industrial real estate make the sector an attractive counterweight to more cyclical asset classes within diversified portfolios.
A defining feature of the family office approach is a greater willingness to undertake asset repositioning projects compared with institutional investors. Families are funding value-add capital expenditure from their own balance sheets, taking on renovation, adaptive reuse, and operational improvement initiatives designed to unlock long-term appreciation. This patient capital orientation allows principals to pursue repositioning strategies that may fall outside the hold-period constraints or return hurdles typical of institutional mandates.
The emphasis on direct and joint-venture structures reflects broader governance preferences within the family office community. By avoiding blind-pool fund vehicles, families retain line-of-sight into individual asset performance, underwriting assumptions, and exit timing. This hands-on involvement also enables principals to integrate environmental, social, and governance considerations more directly into property-level decision-making, aligning investments with family values and legacy objectives.
Managers quoted in the survey note that the reallocation is part of a wider strategy to construct all-weather portfolios capable of withstanding economic downturns and rate-cycle swings. By tilting toward living sectors and logistics—both underpinned by structural demand drivers—family offices aim to reduce sensitivity to short-term business cycle fluctuations and interest-rate shocks that have pressured office valuations and strained non-core retail fundamentals in recent years.
The shift away from traditional office and non-core retail reflects a pragmatic reassessment of risk-return profiles in those sectors. Families are acknowledging persistent headwinds from remote work adoption, corporate space-utilization optimization, and the secular decline of brick-and-mortar retail formats. Rather than attempt to time a recovery in these challenged property types, principals are reallocating capital to sectors where supply-demand fundamentals and tenant credit quality offer more predictable income trajectories and lower obsolescence risk.