Real estate fundraising for value-added and opportunistic projects totaled just over $100 billion in 2024, the lowest level since 2011. Interest rates remain elevated with the Federal Reserve holding steady at its July 30 meeting. At the same time, McKinsey’s Global Private Markets report shows a 150% increase in limited partners ranking distributions paid-in-capital (DPI) as their top criterion for investing in projects.

To understand the impact of these changes, Agora conducted a survey focused on market sentiment and investment strategies in 2025. The resulting CRE investment strategy report shows how industry leaders are adjusting both strategy and investor relations in response to ongoing economic uncertainty.

Key findings

Key highlights from the survey results include:

  1. 44% of firms plan strategy adjustments: Several firms plan changes in their investment goals and strategy to offset the impact of market volatility. Plans included moving into new asset classes or targeting new regions for investment. Some respondents also reported pausing or reducing acquisitions.
  2. Investors back income-stable assets at 84%: Given the current market trends, more GPs have a lower risk tolerance and plan to focus on properties that generate a stable income stream. As a result, 51% of respondents reported prioritizing multifamily properties, and 33% sought mixed-use projects. Fewer firms plan projects that primarily support capital appreciation, like office buildings, hospitality, or retail centers.
  3. 48% of firms adopt an opportunistic strategy: The majority of participants reported staying cautiously active in the market. 48% leverage an investment strategy focused on distressed or undervalued assets where there’s an opportunity to enhance property performance.
  4. Capital raising is challenging for 58% of respondents: The majority of commercial real estate firms reported it’s harder to raise capital than in the past. And 76% of participants shared that their investors are somewhat or very concerned about market volatility.
  5. 31% of investors expect transparent performance visibility: It’s not enough to provide updates on distributions. Investors want more details on property performance, proactive strategies, and operational data. Firms also reported investors asking for forecasts and risk assessments to get a better sense of a project’s long-term success.
  6. Firms increase communication, with 38% reporting weekly: A large portion of firms now share weekly updates on CRE investments with their limited partners. In contrast, only 15% update investors only when necessary, versus taking a proactive approach to communication.

Research methodology

Agora commissioned Talker Research to survey 200 U.S. real estate professionals on investor sentiment and market conditions. This report presents perspectives from leaders with investment or investor relations authority, including managing partners, CFOs, and investor relations managers.

The survey gathered demographic data and responses to 16 market sentiment and strategy questions. The research team chose respondents through a random, double-opt-in process. Talker Research is affiliated with the Market Research Society (MRS) and the European Society for Opinion and Marketing Research (ESOMAR).

The regional divide: Southwest vs West Coast strategy

The report shows regional differences, with some notable gaps between the Southwest and the West Coast:

Southwest firms lead asset class exploration

Commercial real estate firms in the Southwest reported moving into new asset types at 82%, higher than in other regions and 4.6 times the rate of their West counterparts. Top CRE portfolio targets include multifamily properties at 65% and mixed-use projects at 50%.

Only 18% of West respondents reported exploring new commercial real estate assets, with 44% prioritizing multifamily and 25% focusing on mixed-use.

Capital markets vary dramatically by geography

Our survey asked respondents about capital raising conditions and concerns from commercial real estate investors. In the Southwest, only 25% of respondents said capital raising was “somewhat less difficult,” showing relative optimism. Meanwhile, 60% of commercial real estate firms in the West reported that raising capital is more difficult overall, expressing the most challenging conditions among regions.

Why location drives CRE investment decisions

Sun Belt cities like Phoenix, Austin, and Dallas continue to experience rapid population growth. Cushman & Wakefield’s review of the latest Census data through 2024 shows that six of the 15 fastest-growing MSAs are in the Southwest. The region also continues to see strong job growth, with states like Texas leading others at 2% growth in 2024.

Growth in these areas continues to drive higher rental income and property value appreciation, which in turn drives firms to seek out multifamily properties that can provide steady cash flow.

In contrast, commercial real estate firms in states like California and the Pacific Northwest continue to experience regulatory and zoning constraints that may limit new development or changes in asset class.

Generational gap in CRE market adaptation

There’s a delta between experienced investors and newer generations in terms of changes in investment strategy and communication frequency.

Gen Z vs Baby Boomer response rates

There is a significant difference between investors of different generations. Gen Z is nearly three times more likely to adjust plans, seeking better opportunities to improve asset performance. These adjustments include moving into new investment classes, exploring new regions, or pausing acquisitions. In contrast, 55% of Baby Boomer respondents reported making no changes to their investment strategy.

Survey results also highlight a difference in how frequently real estate investment firms communicate with limited partners. 44% of Gen Z respondents provide weekly updates, while 45% of Baby Boomer respondents update investors only when necessary.

What this means for leadership

Younger generations are more likely to adjust investment strategies quickly. While this adaptability can be valuable, there are times when commercial real estate firms need to allow a strategy to run its course. Gen Z also prioritizes frequent communication with limited partners, which leadership can embrace as a way to enhance investor relations.

The LP behavior revolution

Firms report that limited partners see risks in the current market conditions, and some GPs are responding with enhanced transparency and updates.

Rising investor concerns about volatility

76% of respondents said their investors are either somewhat or very concerned about current market volatility. Regionally, the Southwest showed the highest concern, with 45% reporting that their investors were very concerned, while the Midwest had the lowest at 15%.

From quarterly to weekly updates

The overall investment industry, including real estate investment trusts, publicly traded corporations, and mutual funds, typically reports to investors quarterly. However, our survey shows that real estate investment firms are increasing the frequency of communication, with 38% of respondents sending weekly reports and updates. In contrast, only 18% reported sending updates quarterly.

What CRE investors are demanding now

After investment returns, CRE investors now rank proactive and transparent communication as the second most important factor in choosing which projects to invest in. Our survey showed that 31% of investors expect visibility into performance and property operations data like tenant retention, cash flow, and marketing strategies.

Many GPs have responded to these market trends by adopting tools that provide investor dashboards and automated report generation to simplify communication.

CRE investment market outlook: 12.9 months of uncertainty ahead

Our survey asked participants to predict how long market uncertainty would last. Responses ranged from less than 6 months to more than 24 months, with the average expectation at 12.9 months. Bain’s midyear private equity report underscores this cautious backdrop, noting that 33% of LPs have slowed private market investments in response to US tariffs.

Wrapping it up

Commercial real estate firms continue to adapt with new strategies and approaches to best support their investor base. Multifamily remains a core asset class, and Sunbelt areas of the country continue to be strong geographic areas for investment. With increasing investor expectations in both performance and transparency, firms that prioritize both will be more competitive in a cautious market.

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