Nearly half of commercial real estate investment firms are shifting strategies in 2025 as they face more headwinds in raising money, new survey data shows.
Thirteen percent of investment managers said it has become much more difficult to raise capital because of ongoing economic volatility, while 45% said it had become somewhat more difficult. Just 10% of investment firms have found it easier to get cash in recent months.
Bisnow/created with assistance from ChatGPT
Forty-four percent of investment firms have changed their investment plans in 2025 in response to market volatility, and another 35% are considering pivots, according to a survey commissioned by Agora, a real estate software firm.
“The 2025 sentiment report shows a real estate market under pressure but still in motion,” the survey concludes. “Firms face tighter capital, rising investor demands, and ongoing volatility. In response, they are changing course. Many are entering new asset classes, shifting geographic focus, and adjusting deal size.”
Investment managers say their clients are increasingly worried about the economy and the performance of the properties they are already invested in, with three-quarters of survey respondents saying their investors were somewhat or very concerned about economic volatility.
Agora, which created and manages a software platform for investment management firms, commissioned a research firm to survey 200 senior professionals with investor or investor relations authority, including managing partners and chief financial officers, about investor sentiment and market conditions.
The ease of capital access varies by region, the survey found.
“The Southwest respondents were more optimistic than those in other regions, where 25% said capital raising is somewhat less difficult,” the Agora report notes. “Meanwhile, none of the respondents in the Southeast said capital raising is less difficult, and 60% in the West reported it is more difficult overall.”
Of the 87 survey respondents who said they had shifted their investment plans because of economic conditions, roughly half said they were targeting new asset classes and regions, while 44% said they had reduced or paused acquisitions, and 26% said they were targeting smaller deals.
<img src=”https://public.flourish.studio/visualisation/24375311/thumbnail” width=”100%” alt=”chart visualization” />
Half of investors are prioritizing multifamily trades in 2025, while 33% are focused on mixed-use assets and 22% are eyeing industrial property. One in five investment firms is targeting either office or retail assets, while just 8% are looking for hospitality deals.
Coastal markets dominate the regional focus, with roughly a quarter of investors prioritizing Southeast, Southwest or Northeast markets each.
The Sun Belt has become the least popular region for investors, with just 2% eyeing the area for deals. The Midwest is now the preferred destination for 22% of commercial real estate investment firms looking to deploy capital.
Among the 42% of investment managers who have noticed a shift in investor expectations or behavior, the mood is decidedly negative. Those survey respondents cited increased caution and fear, delayed decision making, a desire for lower risk and a shift toward defensive strategies among their customers.
Antsy clients are asking their money managers for more information more frequently, survey respondents reported, with 38% now providing weekly updates to their clients and just 3% only offering updates when necessary.
Millennial managers were the most likely to communicate often, with 48% providing weekly updates, compared to the 45% of baby boomers who said they only provided updates as needed.