Real estate has long been a cornerstone of wealth preservation and generational legacy. But as we move deeper into 2025, family offices and ultra-high-net-worth investors are redefining their approach. It’s no longer just about acquiring trophy properties — it’s about strategic positioning, diversification and long-term capital efficiency.
This shift comes amid economic uncertainty, geopolitical shifts and the largest intergenerational wealth transfer in history. According to Cerulli Associates, $124 trillion in wealth will transfer by 2048, with $105 trillion flowing to heirs and $18 trillion directed toward philanthropy. Nearly 81% of this shift — almost $100 trillion — will come from baby boomers and older generations, reshaping portfolio strategies for decades to come.
With my families, I’m seeing this transition firsthand. Younger generations are stepping up earlier, driving real estate strategies with a distinct set of priorities: sustainability, technology integration, liquidity and diversification.
The key question in 2025 is not just where to invest but how to structure and optimize investments for resilience, adaptability and opportunity.
The shift toward selectivity
The global economic landscape is changing, requiring a more strategic, data-driven approach. Interest rate fluctuations, inflationary pressures and evolving capital flows are pushing family offices to think beyond static asset allocation.
While many families prefer to operate in cash, expected global rate cuts could create opportunities for selective leverage and asset repositioning. At the same time, prime real estate remains one of the most effective inflation hedges — especially in supply-constrained, ultraluxury markets where demand remains resilient.
The next generation sees real estate as both a preservation tool and an active investment lever. Their priorities reflect a departure from traditional trophy asset accumulation. Wellness-driven properties that integrate sustainability, design and smart-home automation are in demand. AI-powered security and operational efficiency are becoming essential, and privacy and digital integration are paramount. Younger investors are also diversifying geographically beyond legacy markets such as New York, London and Paris. Their interest is less about status and more about liquidity, agility and exit strategies — real estate must function as part of a dynamic portfolio.
New York City remains a global center for ultraluxury real estate, but families are more selective, focused on long-term value. At the close of 2024 and into early 2025, sales of properties priced over $10 million surged by 85%, showing that prime assets still attract capital. These trends mirror late 2020, when real estate served as a store of value amid broader market volatility.
For many families, holding rather than selling is now the preferred strategy, especially in New York’s tight rental market. Median Manhattan rents hit $4,500 in February, a 6.4% annual increase. Hold-versus-sell decisions depend on timing, tax structure and reinvestment plans. Demand remains strong in legacy neighborhoods like the Upper West Side, Upper East Side, Tribeca and the West Village, while Brooklyn continues to capture next-generation interest. Waterfront and boutique developments with sustainability features and smart-home tech have become strategic entry points for younger investors.
Expanding globally
New York remains a core market; but families are increasingly deploying capital globally, weighing tax efficiency, lifestyle and geopolitical risk along with return on investment.
In Dubai, $4.4 billion in luxury real estate transactions reflect strong demand, driven by zero-income-tax policies, advanced infrastructure and a luxury-first model. In London, despite post-Brexit shifts, families are acquiring assets in Mayfair and Knightsbridge, taking advantage of currency movements and long-term value opportunities. Monaco, where $1 million buys just 19 square meters, remains a haven for privacy-driven investors.
Top-performing family offices are not overconcentrated. A multicity, multi-asset strategy is the best hedge against volatility. Balancing core holdings in ultraluxury markets with high-yield rentals and opportunistic buys ensures portfolios stay resilient in changing conditions.
As heirs take a more active role in shaping strategy, their approach reflects broader values. Experiential luxury is driving demand for hospitality-style, wellness-focused properties. Sustainability is no longer optional—green-certified buildings with solar integration and high-efficiency systems are commanding premiums. There’s growing interest in flexible models like fractional ownership, branded residences and private club real estate.
Technology is also a defining force. AI-powered analytics, blockchain-backed transactions and advanced smart-home automation are now standard expectations. Some family offices are not only adopting these technologies but are investing in the companies building them.
Looking ahead
Luxury real estate in 2025 isn’t just about owning high-profile properties. It’s about integrating them into a larger wealth strategy that’s built for the future.
The most effective family offices are engaging heirs early in investment decisions, balancing traditional luxury holdings with innovation and liquidity, and using technology and private deal flow to stay ahead of the curve.
The key question I ask my families — and that you should ask yourself — is: Are you actively shaping your next phase of real estate holdings, or watching while others seize the opportunities ahead?