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Private capital tightened its grip on commercial real estate last year, with high-net-worth individuals and private equity accounting for nearly half of global CRE investment in 2025.
Private investors poured $464 billion into commercial real estate, a 29 percent increase from the year before. The group represented 46 percent of CRE buys in 2025, according to data from Knight Frank’s latest wealth report.
It marked the third straight year private investors led the market. Institutional investors trailed behind, deploying $347 billion in CRE investment, up about 29.5 percent year over year, according to the Knight Frank findings.
Even so, institutional appetite is starting to cool. Last year marked the first time since at least 2013 that institutions signaled plans to reduce their target allocations to real estate, citing economic uncertainty and stiffer competition, according to research from Hodes Weill & Associates and Cornell University.
That pullback opened the door for private money. With pricing down and deal volume subdued, opportunistic investors found more room to strike, said Travis King, founder and CEO of Nashville-based REALM, an investment collective of ultra-high-net-worth individuals and family offices.
“Private capital tends to be a little bit more sharpshooter in nature,” King said. “ They understand those markets and they fill the gap.”
At the same time, wealthy investors are starting to look a lot more like the institutions they’re displacing, King said.
“The balance sheets of a lot of these private investors are getting larger,” he said. “And then more and more of these family offices are acting … like institutions.”
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CRE investment globally fell after the peak investment year of 2021 amid rising borrowing costs and the fallout of the office sector. Last year, investment in the sector continued to recover, growing 12 percent year over year to roughly $903 billion, with all buyer types reporting increases in spending, according to the report. The double-digit growth was an improvement from 2024, which saw CRE investment climb 8 percent year over year.
There is also an increasing amount of private capital on the lending side. Private debt funds captured a greater share of the CRE debt market over the past year. Investor-driven lenders, which are not held back by tight regulatory standards like some other lenders must contend with, upped their market share to 14 percent last year from 11 percent in 2024, according to data from financial research firm MSCI.
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Among the top markets globally, investors spent the most — some $9.6 billion — on CRE in the London metropolitan area. The United Kingdom also surpassed the U.S. for receiving the most cross-border CRE investment last year — nearly $30 billion.
New York City was the only U.S. market among the top 10 markets for CRE buying globally, with about $4.6 billion of CRE investment last year — good for fifth. However, American capital easily led the way as the top funding source last year, as U.S. investors spent $68.4 billion on CRE deals. That was three times as much as runner-up Canada.