Family Offices manage much of the world’s wealthiest families’ money. Many family offices have sophisticated analysts and investment teams experienced in the financial markets, so it’s interesting to see how they invest and which markets they are considering going into.
In this recent report by Goldman Sachs “Eyes on the Horizon – Family Office Insights” they report some very interesting stats:
Of the 166 family offices polled, 30% said they want to focus on residential/multi-family real estate for their client portfolios over the next 12 months.*
The report also states:
“We have seen a particular focus on multifamily residential, which has provided consistently strong rental growth across various market cycles. Against an inflationary backdrop, among other cash-generating assets, multifamily is even more appealing, given the ability to reset leases. Multifamily has been further supported by an undersupply of housing in the U.S. in particular, coupled with a changing rate environment that may result in home ownership becoming less affordable.”*
They also go on to say that:
“In contrast, only 7% of family offices are looking to increase their exposure to the office sector and only 4% to retail, with 12% and 10%, respectively, actually looking to decrease their exposure to these sectors. The use of office space, which had already been shifting in a number of ways before the pandemic, has since changed structurally, with tenants increasingly preferring newer, technology-enabled spaces with amenities.”
Understanding the habits of sophisticated groups like family offices is critical for us to keep up with changing trends. We built the www.CalTier.Fund online platform around what we considered a very stable asset type; Multi-Family. The comments from the report above support this decision.
CBRE also predicts:
With the for-sale market already supply-constrained, CBRE projects that nearly 3.5 million new market-rate multifamily units will be needed by 2035 to keep pace with demand.**
While all markets and real estate are susceptible to ups and downs, we feel strongly about the demand for multi-family over the next ten years in the United States.
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**https://www.cbre.com/insights/books/us-real-estate-market-outlook-2023/multifamily
