Family offices are no longer just quiet players in commercial real estate. They have become essential gatekeepers of deal flow—and now, as institutional capital prepares to surge back into the market, they may also become indispensable partners.
High-net-worth investors have steadily increased their exposure to CRE over the past decade, transforming their influence across core markets. In 2007, HNW investors allocated just 2.6% of total assets to real estate. By 2023, that share had climbed to 21%, according to the Knight Frank Wealth Report 2026. That shift has positioned family offices as major power buyers with both capital and control over pipelines.
Now, a new dynamic is taking shape. Roughly $144 billion of institutional capital is expected to reenter the market this year, setting up a collision—and potential collaboration—between large institutions and the family offices that have been steadily building their presence.
Brian Bullard, Investment Strategies & Capital Solutions Chair at Polsinelli, tells GlobeSt.com that this next cycle will likely push institutions toward partnership models rather than traditional direct investment strategies.
"Between AI and joint ventures, I think gone are the days where your large institutional [investors] take all the talent" and do everything through direct investments, Bullard tells GlobeSt.com.
Instead, institutions are expected to lean more heavily on smaller partners and specialized investment vehicles, particularly those with proven track records and access to off-market opportunities.
The shift reflects a structural challenge that institutional investors face, one that mirrors the constraints seen in venture capital. Large firms are not typically set up to efficiently deploy capital across numerous smaller deals, as each transaction requires the same level of underwriting and due diligence. With significant sums to place, institutions are often forced to prioritize fewer, larger investments—even if that limits access to certain opportunities.
At the same time, pricing discipline is becoming more important. While institutions have the capacity to outbid competitors, Bullard suggests that the approach is falling out of favor.
"They can overpay for anything they want to," Bullard says. "I just don't think there's an appetite to do that. I think good deals are going to be paramount. They'll be willing to share. As savvy as investors are now, I don't think they have the appetite to be in bad deals like in the past."
That evolving mindset is one reason family offices are emerging as attractive partners. Many bring deep experience and a long-term approach to investing, along with a constant flow of market intelligence.
"The family offices that invested in real estate never stop consuming information," he says.
For institutions, partnering with these groups offers more than just access to individual assets—it provides exposure to established investment platforms.
"You're not investing in one piece of property or two pieces of property. You're investing in a family office that knows how to do what it does really well. Right now, it's still very much whoever controls the pipeline controls the deal," Bullard says.
Historically, institutions and family offices operated in largely separate lanes, targeting different deal sizes and strategies. That separation is beginning to blur as both groups pursue similar opportunities in a more competitive environment.
"Historically, larger institutions haven't been in strong competition with family offices," says Bullard. "They were playing different games. Now I think they're going to need each other more; they're going to cross paths."
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