Although real estate is a local business, capital has no borders and circulates more or less freely between countries.

Family offices (FO) are presented as significant players in the real estate market, holding a considerable amount of assets. Globally, there are an estimated 6,000 to 7,000 family offices with total Assets Under Management (AUM) ranging from $6 to $7 trillion. Of this total, $1 to $1.2 trillion is estimated to be allocated to real estate.

In the context of cross-border investments, family offices hold substantial AUM in international real estate. U.S. family offices are estimated to allocate 8% of their RE portfolio to Europe, representing $80 to $96 billion. European family offices are estimated to allocate 5% to 10% towards U.S. real estate, amounting to $18.2 to $36.4 billion. Latin America (LATAM) family offices are estimated to have $45 to $75 billion AUM in U.S. and $15 to $27.5 billion in Europe. Overall, U.S., Europe, and LATAM family offices collectively comprise a total of between $158 and $235 billion in AUM in international investments in Europe and U.S.⁽¹⁾⁽³⁾

When it comes to commercial real estate, family offices collectively own an estimated 12.61%2 of the world's inventory⁽²⁾ and direct investment is highlighted as the preferred strategy.⁽⁴⁾ In 2024, FO invested 52% of their yearly real estate fund allocation in direct real estate opportunities. According to our sources direct investments are indicated as 2.7 times larger than other alternatives, like private funds. FO have historically preferred to have full ownership of their real estate investments, with 93% of deals closed in 2023 being 100% ownership deals.

Real estate has been consistently ranked within the top four direct investment strategies for US, LATAM, and European family offices, with 77% of FO currently making direct investments in real estate market. Looking ahead, according to PWC—Global Family Office Deals Study, 86% of family offices are expected to maintain or increase their real estate direct investing.⁽⁶⁾⁽⁷⁾

Despite their significant AUM and preference for direct investment, family offices captured only between 2% and 13% of the global real estate transaction volume from July 2022 to June 2023.7 The most attractive sectors for their acquisitions during this period were Hospitality (13%), Retail (8%), and Office (7%) .

The U.S. and Europe represent two distinct markets, each with unique characteristics. Using the U.S., Portugal, and Spain as examples, the following factors illustrate the differences influencing cross-border investment decisions:

Market Transparency & Unification:

Markets like the United States are characterized by high liquidity, transparency, and regulatory unification, with easier access to products through platforms and unified nationwide regulations. This allows investors to operate across multiple states under a uniform legal process. In contrast, a market like Portugal or Spain is described as opaque and decentralized, with limited public data access. Legal and acquisition procedures also vary significantly across European countries, adding complexity for cross-border investors.

Transaction Process Differences:

There are significant differences in transaction processes. In U.S., the Purchase and Sale Agreement (PSA) is often negotiated before Due Diligence (DD), with a refundable deposit becoming non-refundable after DD expiry. In Spain, the PSA is typically negotiated after DD, and an earnest money contract —known as arras—with a deposit (usually 10%) might be used for pending items. Closing practices also differ: In the U.S., title companies oversee closings nationwide and offer a broader range of services than notaries in Portugal or Spain. These procedural differences add complexity to family offices operating across borders.

Market Conditions (Yields and Costs):

Comparing yields and costs of capital between regions, prime asset yields in key European markets range between 3% and 5%. In the United States, yields are significantly higher, averaging 6.4% across all asset types—190 basis points above the European average. The cost of capital has also increased more in the U.S. due to inflation, placing average financing costs above 6.7%, while Europe's increase has been more controlled. These variations in returns and financing costs are key considerations for cross-border investors.

Although family offices are significant players in the real estate sector, they struggle to make transactions compared to other investor types (2 – 13% of real estate transactions). Their annual investment volume worldwide has declined 63% since 2022.⁽⁵⁾ While the sources state this slowdown is "dragged by market conditions" and has led to "quality deal sourcing issues and operational risks", these challenges are likely exacerbated in cross-border transactions due to the additional complexities of navigating foreign markets, regulations, and transaction processes as described.

In summary, family offices remain influential players in the real estate sector, holding approximately 12.61% of the global commercial real estate inventory. However, they are currently navigating considerable challenges in executing direct investment strategies. The sharp decline in global transaction volumes, coupled with the growing complexity of cross-border investments, underscores the urgent need for innovative approaches. This prompts critical questions: What novel strategies might emerge to address these obstacles? Could we witness the rise of alternative investment structures, strategic international partnerships, or sophisticated digital investment platforms? Most importantly, what role can we, as members of SIOR, play in supporting family offices as they expand their cross-border investment activities?

These questions—as well as many others —can be asked, discussed and answered at the next SIOR International Conference, in Lisbon, Portugal, scheduled for June 24-26, 2026. The conference will be the perfect opportunity to meet SIOR members from around the world, as well as learn and have some fun. The event is titled “Global Frontiers: Charting the Future of Real Estate from the World's First Global Village.” As real estate is evolving fast, attendees will be able to consider technology, globalization and rising social and environmental issues that are reshaping the industry. Clients expect more, and SIOR members must be ready to lead with insight and adaptability. Before the conference kicks-off, there is also the opportunity to join a two-day cycle ride to raise funds for the SIOR Foundation and play some golf. Those in need of a holiday can join a post-conference cruise from Lisbon that will head to Spain, Morocco, France and Monaco. For further details and to register, visit www.sior.com/lisbon.

SOURCES

1. Estimation based on an 8% asset allocation form US FOs towards Europe Real Estate investments. Source: UBS Global Family Office Report 2024

2. Estimation based on an 5%-10% asset allocation form European FOs towards EE.UU Real Estate investments. Source: BNY Wealth

3. Estimations based on EY asset FO research
4. William Blair Wealth Management Survey – FO Direct investments – Likelyhood of directly investing within the next 5 years
5. Manner of investing in Real Estate - UBS Global Family Office Report 2024
6. PWC – Global Family Office Deals Study 2023 
7. Other Sources: The European FO Report 2022 Survey