Ultra-wealthy families are done buying real estate. Family offices - the private investment firms managing money for billionaire dynasties - are in full retreat from property markets.
Deal volume crashed 46% since the pandemic boom ended, and asset values dropped from $143 billion to just $55 billion in less than four years.
Family offices currently split their holdings roughly 40% equities and 34% private investments including real estate. But they're shifting into wait-and-see mode.
Interest rates remain high, keeping commercial real estate under brutal pressure. These investors can afford to sit tight until conditions improve.
Some family offices see distressed prices as generational buying opportunities, but they're picky about what they buy. Industrial and multifamily properties are attracting capital, while office and retail sectors remain toxic.
They're betting on supply-chain infrastructure and housing demand while abandoning the outdated office building model.
Track institutional sales of office buildings in major metros over the next six months - that's where the real distress will show up.
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