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Real estate & the family office

October 25, 2021 White Paper 10 min read
Authors:
Marty West Plante Moran REIA Zack Otte Plante Moran REIA
Successful management of a family office investment portfolio requires a carefully guided strategy focused on asset diversification, risk mitigation, experience, and transparent oversight. Real estate, as an alternative asset class, is consistently recognized for its importance in family office portfolios.
real estate investing and the family office

Successful management of a family office investment portfolio requires a carefully guided strategy focused on asset diversification, risk mitigation, experience, and transparent oversight.

Part of this strategy should include a thoughtful allocation to alternative asset classes that can serve to mitigate portfolio risk. Diversification allows the portfolio to thrive over a market cycle subject to varying macroeconomic conditions that may impact returns across various asset classes. One strategy that many family offices have historically embraced is an allocation to tangible real estate assets.

According to the 2019 FOX Investment Survey, the average family office allocates 14% of its assets to real estate — a meaningful number when one considers that the mean investable assets were reported to be $586 million in the same study. Based on these figures, the average family office holds approximately $82 million in real estate investments.

The ownership of tangible real estate assets allows for greater control over investment performance and returns, but also requires much more active oversight than investment in more passive asset classes.

What’s inside

In this white paper, we’ll provide a primer for family offices interested in commercial real estate investing, focusing on four core topics:

  • The role of tangible real estate in a family office investment portfolio
  • Processes for maximizing real estate portfolio value within the confines of the risk tolerance
  • Developing an overall real estate investment strategy for the family office
  • How active real estate portfolio oversight, or asset management, is key to the successful implementation of a real estate strategy

Download the white paper

 

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