Brookfield Asset Management’s $13 billion in property sales so far in 2025 is a sign that large real estate deals are making a comeback after three slow years, according to Lowell Baron, CEO of Brookfield Asset Management’s real estate business.
This year’s sales performance is more than four times the firm’s transaction volume of $3 billion during the first half of 2024 and greater than the $2 billion recorded during the first half of 2023. Major deals this year have been inked in the United States, Spain and Australia, a sign that liquidity is returning even for larger portfolios, according to a Bloomberg report.
“We’re edging back to a more normalized rate of transactions,” said Baron, who assumed his role last month. “Over the last couple of years, there has been a severe lack of liquidity in the market and there haven’t been larger transactions trading.”
Slower sales have been particularly challenging for private equity real estate fund managers, who have struggled to raise capital as funds remained locked in older funds while interest rates climbed. Last year, private real estate fundraising was less than half its 2021 peak at $131.1 billion, according to PERE data.
Brookfield’s first-half sales performance echoes broader industry inertia. CRE investments in the United States jumped 14% during the first quarter, compared with deal volumes that were at their lowest in a decade just last year, according to CBRE data.
Brookfield’s deals include an Australian retirement housing business, a Spanish student dorm owner and most recently, Phoenix, Arizona-based Fundamental Income Properties, which is being acquired by Starwood Property Trust for $2.2 billion. The firm also attracted $5.9 billion of fundraising for its flagship real estate fund during the first quarter, bringing it to a total of $16 billion, the Bloomberg report said.
“When we were out talking to our partners, one of the reasons people were holding back is because they weren’t getting capital back,” said Baron. With these disposals, “we are returning a material amount of capital to our investors and I think it is going to grease the wheels and allow them to allocate to new funds.”
The recovery is strongest in specific sectors, including data centers, rental housing and logistics, said the report. Office buildings, on the other hand, continue to face uneven demand and elevated vacancy for older properties.
“Capital isn’t coming back across the board, which is creating a really interesting investing environment,” Baron said. “For assets that aren’t yet performing that well, that have more stories to them, we’re not seeing capital come back. But for companies that are best in class, there’s significant capital coming back.”
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.