The relationship between families and real estate is long-standing. For decades, property assets formed the backbone of wealth creation for many family groups in Brazil. What has changed is the way investments are made. Where real estate allocation was once intuitive, loosely structured, and often tax-inefficient, it has become increasingly technical, strategic, and integrated into a broader portfolio logic.

Today, family offices operate on two primary fronts within commercial real estate. The first is as indirect investors, allocating capital to real estate funds and private vehicles, often with strategies similar to private equity. In this role, they act as selectors of managers and investment theses.

The second front involves building in-house structures to invest directly in real estate assets. “You already see family offices acquiring entire office buildings, logistics warehouses, hotels, and corporate assets,” Rassi explains. This approach is still more common in assets considered high-quality and low-risk, particularly Class A+ properties.

In direct investment strategies, financial return is not the sole deciding factor. “In many cases, they are willing to pay a bit more and accept a lower percentage return in exchange for the security of a well-located asset,” says Rassi. The preference for consolidated areas, such as São Paulo’s Faria Lima district, shows that property also carries symbolic and patrimonial value, serving as a long-term store of stability for family wealth.

According to Rassi, the relationship is largely complementary. “They are the traditional LPs,” he says. A significant portion of private fund strategies and real estate vehicles only become viable because family offices are willing to allocate capital as anchor investors.

Still, in certain contexts, family offices may compete directly with fund managers in asset acquisitions. This typically occurs in smaller transactions. In larger deals, above R$300 million or R$400 million, it is more common for them to act together, sharing risk and exposure.

In the current environment of tighter credit conditions and fundraising challenges for listed funds, family offices have become one of the main sources of liquidity in commercial real estate. “They have available capital and are able to deploy new money precisely when the market is more constrained,” Rassi notes.

According to him, many development projects and acquisitions were only possible because this long-term, family-backed capital identified attractive risk-return dynamics, effectively acting as a shock absorber for the real estate cycle.

Rassi points out that Brazil’s tax reform is likely to make direct property ownership progressively less efficient compared to structures such as real estate funds. This could encourage a gradual migration of family-held real estate assets into more sophisticated and efficient financial vehicles.

Today, it is still common to find family offices holding properties within their own asset-holding companies. The trend, however, is toward greater financialization of this wealth, with increasing use of funds, exclusive vehicles, and structures aligned with capital markets.