Ultra-high-net-worth individuals and family offices are increasing their exposure to directly owned property even as higher interest rates continue to pressure valuations, according to new data from a global wealth survey examined by IPE Real Assets. The findings suggest that many respondents view current pricing dislocation not as a deterrent but as a buying opportunity, particularly in sectors such as prime residential rental blocks, last-mile logistics, and healthcare-related assets.
Several family office chief investment officers have explained that they are selectively rotating capital out of listed real estate investment trusts and core open-ended funds. Instead, they are pursuing single-asset and small portfolio acquisitions where they can negotiate terms directly and implement value-add business plans tailored to their investment horizons and risk tolerance.
This shift reflects a broader rebalancing of real estate allocations rather than a wholesale retreat from the asset class. Family offices appear to be taking advantage of pricing dislocations created by higher borrowing costs, which have compressed valuations across public and private markets alike. By moving into direct ownership structures, investors gain greater control over asset management, leasing strategy, and exit timing.
The pivot toward direct deals is accompanied by notable changes in capital structure and holding strategy. A pronounced shift toward lower leverage and longer holding periods has emerged, reflecting a renewed focus on capital preservation and stable cash yields. This approach contrasts with the higher-leverage, shorter-duration strategies that characterised much institutional real estate investment in the years leading up to the recent rate cycle.
In addition to outright acquisitions, some families are forming joint ventures with specialist operators to access more complex segments of the market. Life-science campuses and senior housing have been highlighted as target sectors where operational expertise is critical but where families still seek to maintain significant governance rights. These partnership structures allow ultra-wealthy investors to participate in niche real estate themes without building internal capabilities from scratch.
Prime residential rental blocks have emerged as a favoured target, offering stable demand fundamentals and inflation-linked income streams. Last-mile logistics assets continue to attract interest due to structural tailwinds from e-commerce growth, while healthcare-related properties benefit from demographic trends and long-term lease structures with credit-rated tenants.
The survey data underscores that family offices are not pulling back from real estate but are instead recalibrating their approach in response to a new rate environment. By emphasising direct ownership, lower leverage, and partnership with operating specialists, these investors are positioning portfolios for a cycle defined by income stability rather than aggressive appreciation.
The coverage from IPE Real Assets outlines a nuanced rebalancing of real estate allocations among ultra-high-net-worth investors. Rather than abandoning property exposure, family offices are using the current market dislocation to pursue deals with greater control, operational flexibility, and alignment with long-term wealth preservation objectives.