A Growing Source of Capital - Family Offices’ Approach to Real Estate Investing
By Nurit Altman and Mark Fell
Published July 13, 2022 | 10 min listen
Family offices saw their wealth grow during the pandemic, and with more capital to deploy, they, alongside private investors, play an increasingly important role in the real estate market in Canada and abroad. Every family office has a unique strategy and with that a unique approach to real estate investing, which can make it a challenge to predict where their interest will lie in this rapidly changing market environment.
On this episode of The Real Pulse, Mark Fell, Head of the Family Office and Strategic Clients at RBC’s Enterprise Strategic Client Group sits down with host Nurit Altman to talk about how family offices are thinking about real estate. Mark discusses key findings from RBC’s North American Family Office Report, which surveyed 179 offices on their 2022 investment priorities.
View Audio Transcript
From the family offices surveyed, real estate and private equity direct investments totaled 25% investment portfolios in 2021, and approximately half of North American family offices surveyed were seeking new investment priorities for 2022.
Family offices are very attracted to the real estate sector and Canadian family offices surveyed have approximately 28% of their portfolios in real estate.
Family offices take a long-term approach to their investment strategy. In fact, despite many family offices recognizing a rising rate environment, over a third surveyed expected to increase their position in real estate direct investments in 2022.
North American family offices continue to have a bias towards their own markets. Over two-thirds of those surveyed allocate between zero to 20% of their portfolios in foreign markets. This compares to two-thirds of European family offices, which invest outside their home market. RBC’s Enterprise Strategic Client Group sees many European family offices interested in Canadian real estate, ranging from parcels farmland, residential and, significant commercial real estate assets.
88% of family offices surveyed own residential homes, apartments or estates. The key challenge in these offices is succession planning and how the next generation will take an active role in the family business. The next generation often want to deploy family capital into the broader real estate sector even if the family's core operating business is unrelated to real estate.
Disclosures and Disclaimers
Nurit Altman
Managing Director, RBC Capital Markets Real Estate Group
Nurit Altman is a Managing Director with RBC Capital Markets Real Estate Group, and has over 16 years of experience selling commercial real estate across Canada. Nurit specializes in the sale of multi-family, retail, office and mixed-use properties across Canada. Over the course of her career, Nurit has sold over $13 billion of retail real estate. She is based in Toronto, ON and is a licensed real estate Broker with the Real Estate Counsel of Ontario.
F. Mark M. Fell
Head, Family Office and Strategic Clients
As Head of Family Office and Strategic Clients, Mark leads a multi-disciplinary team of highly specialized professionals collaborating together to serve RBC’s largest and most complex clients and enterprising families. In this role his focus is on enhancing RBC’s collective capabilities to better serve the needs of family office and strategic clients including principals, family members and family office personnel. In his previous role as Head of Global Ultra High Net Worth Services, he was responsible for developing and executing a focused UHNW client strategy, value proposition and operating model to strengthen RBC’s business with these important cross-RBC clients.
Family OfficesMark FellNurit AltmanReal EstateThe Real Pulse
