Private Investors Dominate Commercial Real Estate Amid Institutional Retreat
The world's wealthiest individuals are increasingly taking control of the commercial real estate market as institutional investors step back due to high borrowing costs.
Amancio Ortega Leads the Charge
According to Bloomberg, Amancio Ortega, founder of Zara and majority owner of Inditex, invested over $1.5 billion in 2025, acquiring at least 10 commercial properties across North America and Europe.
- Ortega's family office, Pontegadea, has focused on prime, income-generating assets.
- One key deal included a Vancouver office complex leased to Amazon for about $780 million.
Trend Extends Beyond Ortega
Data from Knight Frank shows private investors deployed $464 billion into commercial real estate in 2025, surpassing the $347 billion invested by institutions.
- This marks the fourth straight year of private investors dominating the market.
- The trend began after 2022, when rising interest rates forced institutional players to scale back.
Notable Deals
- Larry Ellison purchased a London office at a reduced price.
- Greg Flynn invested in San Francisco office towers hit by pandemic-era vacancies.
Investment Targets
Industrial assets, offices, and rental housing remain top investment targets.
- The boom in artificial intelligence has driven a 36% surge in data centre investments.
- This has created a new class of digital infrastructure-focused real estate players.
Risks and Opportunities
Real estate accounts for about 11% of ultra-wealthy portfolios, valued for "stable income, inflation protection, and long-term growth."
- Risks remain, with Naguib Sawiris recently cutting the price of a London penthouse after failing to find a buyer.
- Pontegadea agreed to sell a Manhattan office asset at a steep loss.
Ortega's Expansion Plans
Despite risks, Ortega's liquidity remains strong, with Bloomberg estimating €3.2 billion in dividends from Inditex this year.
This will fuel further expansion for Ortega in the commercial real estate market.
Related Articles: