Commercial real estate private equity fundraising is struggling this year in the face of rising interest rates, and most money is funneling to large, influential fund managers. The COVID-19 pandemic sparked an exodus of senior CRE leaders from the industry or to other firms, and today’s market environment could spark another.

The low-interest rate, surging deal-making environment of the last real estate investment cycle pre-pandemic created a remarkable window of wealth generation for senior leaders and decision-makers, but that climate is long gone. What is left in 2026 is a much slower market predicated on discipline and selective investment, but weighed by lower returns, expensive debt, rising rates, persistent distress, and economic instability driven by inflationary pressure.

In CRE, the team you build in good times is different from the team you build when times are hard. Funds raised over the last five years face a tougher path to the outperformance and returns generated last cycle. Executives and senior professionals who built their careers and net worth managing fund vehicles last cycle are considering whether it’s worth it to grind through uncertainty over the next several years.

That raises a pointed question: Are CRE investment platforms prepared to replace them?  

Read more at Commercial Observer.