How Family Offices Can Navigate Greater Complexity in CRE Investing

This piece is adapted from an article originally published by GlobeSt. Read the full coverage here.

Family offices have become increasingly active in commercial real estate (CRE), taking on larger transactions and expanding into more complex asset classes. That growth is creating new considerations for due diligence, according to Jennifer Cleare, Managing Director of Commercial Advisory and Diligence at SitusAMC.  

Larger deals may involve syndication and shared decision-making, making it increasingly important to evaluate sponsors, capital structures and governance rights alongside the underlying real estate. Family offices should also stress-test multiple downside scenarios, including slower lease-ups, softer rent growth, rate volatility and rising construction costs, while carefully considering exit assumptions for investments that may have longer holding periods.

As family offices expand into sectors such as industrial and logistics, student housing, healthcare-related properties and data centers, specialized underwriting becomes increasingly important. Cleare notes that family offices can maintain their traditional advantage of fast, flexible decision-making while applying institutional-quality diligence.  

Independently validating revenue and expense assumptions, incorporating market expertise and conducting downside analysis can help investors evaluate opportunities without adding unnecessary complexity to the investment process or sacrificing speed and agility. Outside specialists can also provide targeted expertise in areas such as valuation, engineering, legal, tax and market research, particularly when family offices enter less familiar property sectors.

To explore how SitusAMC is helping power opportunity across the CRE lifecycle, visit our website.