Family Offices Lock In On CRE As New Generation Of Ultra-Wealthy Emerges

The number of ultra-wealthy Americans is growing, and as commercial real estate values bottom out, they’re eyeing the sector as a safe place to put their millions.

The country is already in the midst of what has been dubbed the “Great Wealth Transfer” as younger generations take hold of nearly $106T in family assets through 2048, redefining the economic landscape. Alongside them are freshly minted billionaires, as artificial intelligence and crypto have rocketed entrepreneurs into a new status. 

The question for many now is how to preserve that wealth. Real estate has long been an answer, but a fluctuating market with growing competition is pushing families away from investment giants — and toward each other.

“We're seeing more and more family offices that previously would have gone to the biggest and best manager,” Newbrook Capital Properties Managing Director Adam Donahue said. “Today, they're saying, ‘Yes, I need real estate. But is this structurally advantageous for me? Is the person that's executing the strategy, do they look like me, and will they make decisions the same way I make decisions?’”

Those concerns are what drove Robert Boucai in 2023 to found Newbrook Capital Properties, which now has a $400M portfolio comprising more than 2,000 multifamily units. The founder of the roughly $1B hedge fund sought a tax-efficient way to invest his capital, and he now partners with other family offices in doing so.

In 2024, individuals worth over $10M totaled more than 970,000 in North America, a 5.2% uptick from the year before. By 2028, that is expected to rise another 5.8% to more than 1 million high net worth individuals, according to Knight Frank’s 2025 Wealth Report.

Moreover, North America was home to over 44,000 of the world’s 104,000 individuals with more than $100M in wealth. Billionaires in the U.S. control $5.7T of wealth, more than the next 10 markets combined.

Ballooning capital among the elite has resulted in the establishment of more family offices to invest it. In 2024, Deloitte estimated that there were more than 8,000 family offices in the world, up from roughly 6,100 in 2019. That is expected to climb to more than 10,700 by 2030, a 75% increase in a decade. 

It helps that 2024 was good to many of the most affluent. The S&P 500 index rose more than 20% for the second consecutive year, Bitcoin surged 120%, and the election of Donald Trump led to the extension of tax cuts that disproportionately benefit the wealthy.

Among those tax benefits for family offices was the preservation of the 1031 exchange, which defers capital gains taxes, and restoring and permanently extending bonus depreciation for qualifying real property assets.

Meanwhile, the real estate sector has been quiet. The market peaked in 2021, but higher capital costs and a continued pricing reset have caused a 60% drop in investment volume globally, according to Knight Frank.

Family offices could help lead the recovery. 

Direct real estate ownership already makes up 22.5% of the average family office’s portfolio. But as the real estate market has stabilized and interest rates have begun to come down, 44% of family offices surveyed by Knight Frank said they are looking to increase allocations to real estate.

Declaration Partners, backed by billionaire David Rubenstein’s family office, is among those that have already taken aggressive steps. It has raised a $303M fund to target commercial real estate, with nearly 60% of the capital deployed as of October.

In December 2023, not long after tech CEO Michael Dell’s family office, MSD Capital, merged with Byron Trott’s merchant bank BDT & Co., the combined firm raised $3.2B for a real estate credit fund. Dell and employees of BDT & MSD Partners contributed $600M alone. 

But smaller family offices are also looking to tap into the market. 

In 2020, Jeremey Tahari took control of the family business ventures previously run by his father, fashion designer Elie Tahari, restructuring them into a single private equity firm, Tahari Capital.

He also built out a brokerage arm to service the family business, along with those of friends and acquaintances. 

“We had a business that has been around for 50 years that, to enter the next chapter of growth, needed to become a bit more corporate,” Tahari said. “That's how Tahari Capital was born.”

Starting in late 2023, Tahari Capital made a string of real estate purchases. Most recently, it paid $11.8M in January for a 31-unit apartment building in New York’s East Harlem.

The transactions were part of efforts to recession-proof the family’s portfolio, Tahari said. That includes transitioning its East Hampton retail holdings into multifamily in Manhattan through a 1031 exchange.

It has become common for families to invest in and with each other, especially as some firms have raised their own funds and established more formal parts of the business, said McDermott Will & Schulte partner Elena Otero, who advises real estate developers and investors as well as high net worth individuals, families and family offices.

“As activity picks up, I am seeing a fair amount of fund discussion among family offices, because there's been so much dry powder,” Otero said. “There are certain family offices that are very comfortable with real estate that are seeing a great opportunity to put together some funds so that they can have indirect investing from family and friends.”

Realm founder and CEO Travis King, who previously founded Brixton Capital, said collaboration has become increasingly necessary as gauging the market has become more complicated and institutional funds have grown opaque.

His firm invests on behalf of about 115 families, each of which typically has between $200M and $250M in investable assets.

“You either have folks that were very heavily allocated to real estate, that had upwards of 25% or 30% allocations, or you had groups that had relatively little,” King said. “That happens a lot when somebody would get a big liquidity event from something and they just haven't found an effective way to get allocated to real estate.”

“It tends to be a pretty elusive asset class if you don't have ready-made access to it,” he added.

Large asset managers like Blackstone and Apollo have been racing to grow their assets under management. In doing so, the firms have attracted the capital of institutions, including life insurance companies and pension funds.

Such investors would have previously acted as limited partners but are now able to limit their direct exposure to the sector through asset managers.

But many funds have been slow to deploy capital, making it difficult for those sources to reinvest. Seeking new capital, asset management giants have turned to target smaller investors, whether high net worth individuals or retirees.

“I don't think [large asset managers] realize the nuances and the interconnectedness that a lot of these families have, like tax strategy,” King said. 

Each family requires a bespoke solution. When it comes to real estate, many want to keep some control, even if individual offices are investing alongside others, as it is one of the few tangible assets with intrinsic value, according to King.  

“The groups that have been very good at raising capital, I'm sure [large asset managers would] love to have the capital for all these family offices, but they're not particularly good stewards of the capital when it comes to real estate, because real estate is so foundational for these families,” King said.

Taking control “came from a need to service ourselves better than others were,” Tahari said.