How Private Investors are Dominating the Investment Real Estate Market
Amid rising interest rates and market volatility fueled by tariffs, institutional investors are taking a more cautious stance. As larger firms scale back or become more selective, private investors are stepping in to fill the gap—playing an increasingly active role in the commercial real estate market.
Once limited to a small segment of the market, private investors now command a significantly larger share of the investment real estate landscape.
Defining a Private Investor
For the purposes of this analysis, private investors are defined as individuals or trusts investing directly in real estate. Their holdings are not part of a Real Estate Investment Trust (REIT) or affiliated with any institutional entity, whether large or small.
Changing Market
In 2011, private investors accounted for just 29% of commercial property ownership. In contrast, institutional players—including investment firms (31%) and REITs (25%)—collectively dominated the market. However, over the following decade, the landscape shifted significantly. By 2021, private investors made up 55% of commercial property investors, overtaking institutions and signaling a major realignment in market control. As of 2024, private investors made up 61% of the overall real estate market.
While controlling 61% of the commercial real estate market is impressive on its own, the true extent of private investor dominance becomes clear when the numbers are examined more closely. It's a common misconception that private investors primarily focus on smaller properties—an assumption that doesn’t hold up under scrutiny.
Here's a breakdown illustrating just how significantly private investors are shaping the market as of 2024:
91% of apartments valued under $15M are controlled by private investors.
75% of apartments valued between $15M to $50M are controlled by private investors.
82% of retail valued under $15M are controlled by private investors.
60% of retail valued between $15M to $50M are controlled by private investors.
75% of office space valued under $15M are controlled by private investors.
64% of industrial property valued under $15M are controlled by private investors.
What it Means for Investors
As institutional investors are scaling back, private investors are stepping in as they see an opportunity. Individuals with experience will know their market and preferred property type. Even with this amount of knowledge, no investor is going to add to their portfolio without consulting an advisor to see if it's the right choice t