Direct real estate versus funds for family offices: the data

Real estate is the one alternative asset class that family offices hold directly more often than through managers, and the allocation is now falling after a long period as the largest private holding. Goldman Sachs' 2025 Family Office Investment Insights survey found 44% of 245 family offices invest primarily directly in private real estate, while they rely mainly on managers for other alternatives. Campden Wealth's 2025 North America report found 75% of offices hold real estate at an average 18% of the portfolio. UBS's 2026 report, summarised by Canadian Family Offices, put the global figure at 11%, and the full report shows 8% planned for 2026. The choice between direct ownership and funds turns on control, cost and whether the family has an operating capability.

Allocation data

The direction is consistent across sources with different samples. Citi's 2025 report found net bullish sentiment on real estate fell from +19% to +6% in a year. TIGER 21 members cut real estate by three points to 23% of allocations in the year to the second quarter of 2026 while raising private equity to a record 34%. UBS's 2026 press release named real estate as the family's most common operating business sector at 17% of respondents, which helps explain why so much of the exposure is direct: many families own buildings because they built or developed them.

Why real estate is held directly

Three features make property suited to direct ownership in a way operating companies are not. Assets can be valued and financed individually, so a family can buy one building without a portfolio. Management can be outsourced to property managers without ceding ownership. And families that made their money in development already have the people. Campden's 2025 data show 70% of North American offices hold residential property and 58% industrial and logistics, with residential making up 30% of the average real estate book.

PwC's 2025 deals study found real estate accounted for 39% of family office deals in the first half of 2025, its highest share since 2019, with 2,804 transactions worth $54.8bn. The deal count is far below the 5,193 recorded in the second half of 2021, but real estate held its share as other categories fell faster.

What funds offer instead

Funds give diversification by geography and sector, access to strategies a family cannot run alone (large logistics platforms, data centres, operating hotels), and no management burden. The costs are fees, the loss of control over leverage and exit timing, and illiquidity on the manager's schedule rather than the family's. BlackRock's 2025 survey, summarised by Caproasia, found 20% of offices expected to increase real estate allocations against 33% for private credit, and 75% were bullish on infrastructure, where direct access is far harder. J.P. Morgan's 2026 report, summarised by Gulf Business, found infrastructure at only 0.7% of portfolios with more than 70% of offices holding none, which suggests the fund route is the realistic one for that adjacent asset class.

Sector preferences

Campden's 2025 sector data are the most detailed available for family offices.

Industrial and logistics and residential were favoured for future investment; office was least favoured. BNY Wealth's 2025 survey found 22% of offices will prioritise private real estate over the next year, helped by "the asset's potential use as an inflation hedge".

Deciding between the routes

A family with an operating background, a concentrated home market and the appetite to hold through cycles will usually own directly and may use funds only for sectors it cannot reach. A family without that background pays fund fees to buy management and diversification, and should compare those fees with the cost of hiring. Either way, direct property is the least liquid holding most families own, which matters when the portfolio needs rebalancing; see rebalancing an illiquid portfolio. The place of property among other real assets is covered in gold and real assets for family offices, and the full allocation picture in family office asset allocation 2026.