High-Net-Worth Family Offices Turn to Real Estate Investments

NEW YORK, NY — Family offices are increasingly investing in real estate as they seek alternatives to traditional assets. In recent discussions, Travis King, CEO of Realm, a multifamily office investment platform, highlighted the rising trend. Realm manages over $12 billion and caters to families with around $200 million in investable assets.

King explained how family offices are pooling their resources for larger deals. This collective approach allows them to share expertise and access better investment opportunities. King stated, ‘We are better investors collectively than we would be individually.’ He noted that while institutional investors have increased their real estate allocations, family offices have been slower to do so.

‘Finding ways to access direct real estate will allow families to diversify more,’ King remarked. This diversification can be challenging due to the time and resources required to manage real estate investments personally.

King pointed out that real estate is always evolving. The traditional adage of ‘location, location, location’ remains relevant, but he added that Realm’s strategy includes moving across different property types and geographies. By managing a large pool of assets, Realm gains access to diverse deal flow.

As for current market conditions, King sees opportunities in the office sector, suggesting that pricing has stabilized in many areas. He mentioned active evaluations of investment opportunities in Northern California, highlighting the intrinsic value of certain properties.

‘Reducing interest rates helps real estate in most every regard,’ King stated, predicting that lower rates would boost transaction volumes. However, the market also faces challenges. The rising CMBS delinquency rate, which hit 7.2% in July, reflects broader stress in the office market.

The increased prevalence of fraud in the rental industry has also raised concerns among landlords. Reports indicate that nearly all landlords have encountered issues with tenant document falsification, leading to financial losses.

Despite these challenges, investment firms like Milestone Group continue to attract capital. Their latest fund closed at $1.1 billion, underscoring confidence in the multifamily sector. As the landscape adjusts, stakeholders are hopeful for recovery and lucrative opportunities ahead.