We frequently speak with sponsors about family offices as equity capital sources. There is a common misconception that family office decisions are grounded in capital preservation, and therefore, should be interested in core / core+ investment opportunities. While capital preservation is an investment objective, it is important for us in the real estate industry to recognize that family offices generally accomplish this objective through investment strategies outside of real estate. Family office real estate allocations are often targeted toward more opportunistic and value-add projects to complement other conservative investment strategies. In our current low return environment, family offices typically aren’t looking to us for capital preservation strategies but are seeking real estate sponsors who can create value and add yield to augment portfolio returns.
President and Managing Director