How family offices are investing in real estate

Author Marcus Baram

Marcus Baram is a contributing editor at Crain Currency, where he covers the intersection of finance and politics. Prior to joining Crain Currency, Baram was a staff writer at Fast Company and an editor at Huff Post. He has also written for outlets such as The New York Times, The Atlantic, and Vice. Baram is an expert on economic policy and has a deep understanding of the ways in which politics shapes the global financial system. In his role at Crain Currency, he brings a unique perspective to the complex and ever-evolving world of finance. With his keen analysis and clear writing, Baram helps readers make sense of the important issues impacting the economy today.

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Jan 30, 2025

3 months ago

Family offices are increasingly looking for opportunities in real estate, ranging from logistics to multifamily housing. But they're applying more due diligence to projects — looking ahead to arbitrage options when interest rates drop — and next-generation investors have a greater appetite for sustainability.

That was the consensus of three real estate investing experts — BNY Mellon senior wealth strategist Boryana Zamanoff and CBRE Senior Managing Director Zaahir Syed and Executive Director Compie Newman — in a recent podcast episode, "We Are Family: Private capital funding and family offices."

While many family offices missed the industrial and multifamily boom in recent years, Syed expects a lot more movement into housing over the next two years. "That includes student, manufacturers, capital-A affordable, build-to-rent and, obviously, multifamily. ... Obviously there's a clear supply-demand imbalance."

Given the importance of legacy and succession, family office members are also focused on assets that "are going to have the durability to last for your retirement." That includes data centers, infrastructure assets and some industrial logistics assets "that you can kind of own forever" and print income that would benefit a defined-contribution plan. Nearly $1 trillion worth of real estate is under development in the data center space, Syed said.

Yet in the wake of the collapse of regional banks like First Republic and Silicon Valley Bank, investors continue to be much more careful about whom they work with, Zamanoff said. "If they cannot have control, they're really vetting."

Overall, she said, her clients are "perfectly positioned to take advantage of opportunity." In a high-interest environment, "they pay cash and pay cash to get in and get at the distressed price," Zamanoff said. They also "lend money to their own children at the intrafamily loan rates that the IRS publishes, which are still lower than what their children can get from a commercial lender. Our clients are creating intrafamily wealth transfer vehicles like qualified personal residence trusts, charitable lead trusts, which benefit and perform better in a high-interest-rate environment."

And yet, Zamanoff said, they're looking for those arbitrage opportunities again when interest rates drop "to basically make money on the difference between what their portfolio returns and the cost of borrowing capital."

Author Marcus Baram

Marcus Baram is a contributing editor at Crain Currency, where he covers the intersection of finance and politics. Prior to joining Crain Currency, Baram was a staff writer at Fast Company and an editor at Huff Post. He has also written for outlets such as The New York Times, The Atlantic, and Vice. Baram is an expert on economic policy and has a deep understanding of the ways in which politics shapes the global financial system. In his role at Crain Currency, he brings a unique perspective to the complex and ever-evolving world of finance. With his keen analysis and clear writing, Baram helps readers make sense of the important issues impacting the economy today.