The Douglas Elliman | Knight Frank 150: Family Offices Set to Expand Real Estate Investment

According to the 2025 edition of The Wealth Report, Douglas Elliman and Knight Frank’s flagship research report, a survey of 150 family offices finds investors keen to broaden their exposure to real estate, a sector they view as offering both growth potential and wealth preservation.

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Through November and December 2024, Knight Frank interviewed 150 single and multi-family offices across the globe. The family office (FO) panel covered 121 single-family and 18 multi-family offices as well as 11 heads of more diverse structures. The FOs were headquartered in 29 cities across Asia, Europe, the Middle East and the Americas, with strong representation from FOs based in London, Singapore, New York, Geneva, Sydney and Hong Kong SAR.

Assets under management (AUM) averaged US$560 million, totaling more than US$84 billion across the 150 FOs. Around 40% of FOs surveyed had operating businesses with a focus on real estate within their portfolios.

Allocations to real estate rose over the past 18 months, with 28% of FOs increasing their allocation, compared with 17% reducing their exposure. The top real estate sectors for current allocations are led by offices (20%), luxury residential (17%), industrial (14%) and hotels (12%).

Future plans

Liam Bailey, head of global research at Knight Frank says: “Despite concerns over the macro environment, 44% of respondents expect to increase their exposure to real estate over the next 18 months, compared with only 10% looking to reduce their investments. In terms of sectors in demand, the top three targets across the panel of FOs are Living sectors (14%), Industrial/logistics, (13%) and Luxury residential (12%).”

While the general tenor is for more rather than less exposure in real estate, there are a number of challenges that FOs face in meeting these investment objectives. The biggest barrier to increased real estate activity was defined as a difficulty in identifying reliable partners or operators (23%), followed by challenging tax regimes (20%), high competition for assets and the need for speed to access opportunities (19%). Regulatory and compliance barriers (17%) were also noted as major concerns.

The portfolio

Some 70% of real estate investment is domestic, with the most domestically minded FOs based in New Zealand (93%), Australia (90%) and the US (86%). The most geographically diverse portfolios are those of FOs based in Switzerland (31% domestically invested), Hong Kong SAR (33%) and Singapore (41%).

For most FOs real estate investment is viewed as a medium- to long-term strategy, with few investments made with a sub three-year time horizon (3%). The proportions are similar for three-to-six-year (32%) and six-to-nine-year (28%) horizons, although the largest share of investments is made with an outlook of nine years or more (37%)

Residential property

Nearly two-thirds of FOs manage private family residential properties. The main objectives for this management are Family use and legacy (44%), Capital preservation (29%) and Diversification (20%), with Potential rental income coming in last at 7%. On average, those FOs managing private family residential properties are responsible for 4.7 properties, ranging from five in Latin America to 4.2 in North America. Of those with an active family residential portfolio, 25% are considering the acquisition of property over the next 18 months, and 20% are considering a disposal of homes.

Next generation leaders

Baby boomers (60 to 78 years) lead in terms of primary decision-making across the panel, heading up 50% of the FOs surveyed. Gen X (44 to 59 years) is the next largest cohort, with 36% holding primary decision-making control.

The baton is slowly being passed to millennials (28 to 43 years), who make up the remaining leaders.

While primary decision-making responsibility appears to be tightly held by older age groups, 58% of FOs are actively involving the next generation. While 35% of those who have involved the next generation have seen no shift in strategy, 47% have seen “some” shift and 18% have been rewarded by a “significant” shift.

Of the 150 family offices surveyed by Knight Frank, 58% said that the next generation is already involved in investment decision-making. Almost 40% said there had subsequently been a change in the investing strategy. Some 11% said the strategy had “shifted significantly”.

The survey confirms that millennials and Gen Z are being prepared for primary decision-making positions. Almost one in ten respondents said millennials are already the primary decision-makers, and 44% said millennials hold secondary powers. A fifth of respondents said members of Gen Z hold secondary powers. Some 63% of our millennial respondents said they had already put money into sustainable investments, compared with just 35% of baby boomers.