Private real estate fundraising showed signs of a cautious recovery in 2025, posting its first year-over-year increase since 2021 despite a high interest rate climate and geopolitical uncertainty.

Global private real estate funds raised $172B last year, up 13% from $152B in 2024, according to a new report from With Intelligence by S&P Global. Still, the report cautioned that fundraising is unlikely to return to the peaks seen in 2021 and 2022, with higher interest rates continuing to stifle capital markets activity.

The yield on the 10-year Treasury — a benchmark that helps shape borrowing costs for many CRE loans — has remained stubbornly above 4% for nearly all of the last two and a half years, even as the Federal Reserve has cut short-term interest rates multiple times during that span.

The market should curb expectations of a leap in fundraising in 2026, the report stated, as the largest active closed-end real estate funds have capital-raising targets similar to 2025. The vast majority of funds raised in 2025, nearly 90%, were in opportunistic, value-add and debt strategies.

The 10 largest real estate funds have maintained fundraising levels since 2022, bringing in $68B in 2025. Large general partners have scaled up through asset growth and merger and acquisition activity, developing diversified platforms to offer investors.

Outside of the top funds, others have found market terrain harder to navigate. Just two funds accounted for more than half of the $4.2B that new real estate managers raised by the third quarter of last year: Derby Lane and Town Lane Management.

Banks accounted for almost 60% of the originated CRE mortgages maturing in 2025, though that share is projected to decline over the next five years as large financial institutions reduce CRE exposure. Banks' exposure to the absolute dollar value of maturing commercial loans is projected to peak at $387B in 2029, then decline to $354B in 2030, while its relative exposure will also decline.

There are several large pensions that remain under-allocated to real estate relative to their targets and offer a platform for fundraising growth, including the State Teachers Retirement System of Ohio, the Healthcare of Ontario Pension Plan and the Colorado Public Employees’ Retirement Association. The Ontario pension fund, in particular, has $8B in commitments that it still needs to allocate to real estate.