Introduction
Amidst the Iran war and resurgent inflation in many economies, global investors have turned to real estate as a classical hedge against inflation. To be sure, the cycle is starting to turn—as price appreciation is gradually improving for the European CRE (commercial real estate) basket and the United States (US) is showing a more nascent recovery.
But where are we on the desirability of real estate as an asset class for global institutional and retail investors? After all, real estate stood at the epicentre of the last financial crisis. Since the Global Financial Crisis (GFC), certain segments of the industry—or real estate ‘food groups’—have caused shudders in the market. Since 2017, in the US and other advanced economies, retail was meant to be the “next big short”,[1] as consumers pivoted to e-commerce. And in the wake of the sudden economic stops related to the COVID-19 pandemic, the ‘WFH’ (working from home) phenomenon was meant to put the nail in the coffin for office assets.[2] And yet, even with the steady growth of online retail and ‘new ways of working,’ retail assets have delivered the highest returns across the property index in the US in 2025.
From a portfolio standpoint, real estate (RE) has competed with other elements of the real asset landscape, as investors have increased allocations to private equity and infrastructure across jurisdictions—asset classes which, in some cases, have provided higher returns or value appreciation than RE. Private credit, too, had been a hot play, magnetising some flows away from traditional real estate allocations, especially in recent years; and the performance of REITs (real estate investment trusts).[3] But amidst large-scale redemption requests in the private credit space[4]—together with a pursuit for a portfolio hedge against inflation—the other part of private markets, real estate, is once again back in favour.
As the cycle turns, we need a whole new set of ideas to guide the next generation of real estate investing. ‘Beds and sheds’ (residential and logistics assets) and innovations, or prop tech (property technology) have been powerful and lucrative themes for the past two decades. In recent years, data centres—as the consummate ‘convergence’ between real estate and infrastructure—have captivated patient investor capital and construction activity with investments amounting to trillions of dollars.[5] What is next?
We are currently amidst the largest generational transfer of wealth in human history, to the tune of some US$90tn over the course of the next two decades.[6] For high net worth individuals (HNWI) and some family offices, approximately 20 percent of the average portfolio is held in real assets or private markets. Should retail capital follow this pace (prompted by, for example, changes in retirement plans to include more private assets),[7] then some US$18tn should find its way to private markets.
Standing in competition with credit, infrastructure, and private equity managers, RE fund managers and developers will need to offer a compelling vision of the ways in which RE can offer superior performance and value appreciation over the long term. On the institutional side, GPs (general partners) will need to offer their LPs (limited partners) an enticing vision—especially as LPs may choose to go into more direct investments. And households and regulators will need to have confidence in durable investor protections—for placing retail capital into illiquid assets—as the recent private credit rout evidences—can be fraught with fear and ‘runnable’ scenarios. So where do we go from here?
Looking around the corner, some of the most formidable investing themes may come from overturning previously held convictions about fiscal and monetary policy; the geopolitical landscape; and demographics, agglomeration, and affordability. As one prominent CEO recently put it, we’ve been thinking “up and to the right” a little too much.[8] Many executives and investors still take cover in the conviction that the future will be an extrapolation of the status quo. However, by adopting a clear-eyed view of key elements within the changing macroeconomic and geopolitical landscape, investors and developers can be furnished with a dynamic set of themes that can guide and inform decision-making about the availability of capital; portfolio selection; and the optimisation of operations and management at the asset level—all essential components of a new playbook as real estate turns from a “beta to an alpha type investment.”[9]
Fiscal and Monetary Policy and the Built Environment
One of the reasons why global financial markets have been so buoyant as of late—amidst the conflict in Iran, and with the price of oil hovering around US$100 per barrel—is the promise of the fiscal impulse. That is, market participants expect governments to open the fiscal spigots in order to shield households and companies from a sudden shock. Going back to the initial disruptions related to the trade tensions in 2018, to the economic stops and supply shortages related to the COVID-19 pandemic, to Russia’s invasion of Ukraine, to the effects of ‘Liberation Day’, and now to the Iran war, governments have demonstrated a robust willingness to step in and support consumption and investment for both businesses and households. So strong has this fiscal support been that most recently in Japan, the largesse of government[10] actually stymied an increase in inflation.[11]
Stunningly, this ramping up of public debt has not deterred investors from holding government paper. Despite stark warnings from the Congressional Budget Office (CBO) in about the mounting deficit in the US; near-record interest rate payments in Japan;[12] and gridlocked budget negotiations in France, treasury auctions in these advanced economies have been oversubscribed as of late[13] –indicating that investors are still willing to hold sovereign debt as a ‘safe haven’ asset and therefore to fund deficit spending.
Availability of Capital: Fickle vs Sticky—Public vs Private Markets
What this might mean in the short run is that when fiscal spigots are unleashed, fickle capital may be diverted from real estate equities and into treasury markets. When the yield on the US 10-year briefly touched 5 percent in October 2023—with some maturities offering yields far above this—investors rotated out of real estate equities and into the treasury market.[14] With sharp rises in treasury yields—be it in the US or, for example, the UK— ‘fickle‘ capital may rush into government paper,[15] putting pressure on public investments in real estate, such as REITs. At the same time, however, ‘sticky’ or patient, long-term capital may be pulled into private markets in real estate, as sharply rising bond yields may indicate rising inflation, against which long-term investors might view real estate as a useful hedge. While specific bouts of bond market volatility may pull some ’fickle’ retail investors into fixed income in a chase for yield, the steady allocation of private wealth to private markets is likely to dominate over the longer term.
Cost of Capital in a Higher-for-Longer Environment
Set against the backdrop of generous subsidies to support demand, central banks may also need to raise interest rates in order to stave off inflation. As European Central Bank President Christine Lagarde highlighted in May, if government support is not ‘temporary, targeted, and tailored,’[16] then monetary policy will have to be tightened. This, of course, will lead to a higher cost of capital for real estate developers and fund managers.
While initial waves of fiscal largesse might prompt tighter monetary policy as a response to inflation in the short to medium term, longer-term structural trends may also lead to a higher interest rate environment within many advanced economies. Therefore, the cost of money (and the cost of refinancing) may remain relatively more expensive. Geopolitical dynamics explored in the next sections of this report—including the persistence of protectionism, the advent of the ‘re-industrial era’, the pursuit of ‘resilience’ within many economies, and the impulse towards populist policies—may contribute to a slightly higher natural rate of interest over the longer run. This is true even in the age of AI, which is designated by some to be ‘disinflationary.’[17]
The presence of these structural forces within many advanced economies will likely mean that RE developers and fund managers may need to become accustomed to a higher cost of capital, and potentially lower valuations. Therefore, the ability to offer core plus and opportunistic investments (in a similar vein to data centre development) may become imperative for the provision of higher yields and capital values. The ability to take on development risk and enter construction early offers the opportunity for a higher J-curve at the end of an investment, providing a potentially handsome exit. Thus, the definition of what constitutes ‘core’ and ‘core plus’ assets may need to be expanded in the new cycle of real estate. Additionally, the convergence between real estate and infrastructure may therefore become crucial offerings for portfolios in a ‘higher for longer’ interest rate environment.
Fiscal Fissures and the Availability of Capital: The Upside
Looking beyond emergency situations, some forward-thinking governments are enacting policy shifts in order to proactively address fiscal imbalances, which can translate into upside potential for long-term capital raising in real estate, from both institutions as well as retail. With rising entitlement spending, higher costs of healthcare, and longer life spans, governments of countries such as Australia, Canada, the UK, and Japan are actively engaged in directing investments to boost the value of national pensions. Stepping up allocations to real assets is becoming a pivotal part of this value creation.
While Australia and New Zealand have been frontrunners in this space with their superannuation funds, Canada is now launching a sovereign wealth fund (in addition to their real asset giant pension funds, or the ‘Maple 8’). In Japan, one of the world’s largest institutions is beginning to invest in real estate and infrastructure in its own domestic market.[18] In the US, the inclusion of private assets into 401-K retirement plans will eventually pave the way for retail capital to find its way to the built environment beyond publicly traded REIT structures.
While Europe may be earlier in the programme to boosting retirement assets,[a] some 10 trillion euros of household assets will eventually need to find their way towards investment products. That European household wealth is predominantly concentrated in real assets[19] may mean that private wealth portfolios may naturally be directed toward private markets, including real estate, given the Peter Lynch adage to “invest in what you know.”[20]
For example, the SCPI investment vehicles in France (les societés civiles de placement immobliers) offer households indirect exposure to invest across the real estate spectrum, with a growing portfolio share outside of France, in a boost for diversification.[21] Should Europe’s Savings and Investment Union truly take effect, European regulators will look to generate long-term assets and to match these with savings mobilised by households.[22] Thus, the power of private capital portends a real promise for real estate fund managers in Europe as it seeks to grow its private pensions – and the opportunity exists for foreign as well as domestic GPs to court retail investors.[23]
Moreover, while life insurers in Europe will look for long-term infrastructure assets to generate yield,[24] the deployment of capital to infrastructure can, of course, have a multiplier effect for real estate portfolios by generating windows to take on new development opportunities—and hence potentially raise capital values—as well as by boosting underlying land value. Added to that, again, forward-thinking governments will be enacting privatisation to raise revenue[25] which can, in turn, spell further opportunities for real estate development adjacencies, and ultimately, end investors. Fund managers will need to identify governments that have a deeply embedded commitment to privatisation, and a track record of executing this across variegated provincial and municipal areas, in contrast with those paying lip service to supposed auctions on a near or far horizon.
Taxation: Implications at the Portfolio Selection and Asset Level
The relationship between taxation and the built environment is often fraught with emotion. Taxes on fixed capital are one of the oldest and simplest ways of raising revenue for governments. However, in considering bright spots for investing, the continued proliferation of tax havens—be it for corporate or income taxes—has, in turn, generated opportunities for creating value and yield in commercial real estate. On the corporate side, office stock in Ireland is a case in point, where industrial values and rents are steadily rising.[26] A flat income tax regime in Italy has wooed high net worth individuals to Milan, a city which is now ‘Europe’s hottest housing market’ (with a further added boost from the development for the Winter Olympics held in February 2026).[27] And in the US, states that do not levy an income tax—such as Florida and Texas—have magnetised a steady inflow of residents in recent years. However, in the case of Florida, a carbon tax in the form of sky-high insurance costs has also caused a reversal of some of the strong domestic migration patterns in the wake of the COVID-19 pandemic.
Despite moves to establish a global minimum tax rule (the OECD’s ‘Pillar 2’),[28] and some local governments’ efforts to levy new taxes on residential properties,[29] other governments will always find a way to stimulate local growth by creating havens for corporations and individuals. Getting out in front of such regulations and plotting investments along the path of steady migration patterns can provide significant upside potential for long-term real estate investors. And, at the asset level, while real estate tax structuring is ever more complex and onerous, the ability to be nimble and creative remains paramount. Savings accrued for institutional investors along the lines of California’s ‘Prop 13’[30] is a case in point.
The Geopolitical Landscape: Global Trade, the Repricing of Risk, and Geographical Asset Allocation
A second key set of themes to guide and inform real estate investing for the next generation emanates from an overturning of commonly held perceptions about the geopolitical environment. First, even despite a record number of trade restrictions, global trade is alive and well – and this spells certain opportunities for geographical asset allocation, as well as for specific assets. Second, the degree of institutional change in the US – as the world’s second-largest most valuable real estate market (second to China) [31] – has prompted many investors to reprice risk and adjust their exposure to the US amidst the ‘great diversification.’ Third, with record levels of government debt in many advanced economies, we may see the convergence of some emerging markets (EMs) with developed markets (DMs) in asset allocation, as investors reprice risks for investing in specific jurisdictions, and reset premia for different markets.
Global Trade: Alive and Well
Despite a record number of trade restrictions in both goods and services around the world, and the withdrawal of the US from the global trading order it largely created, countries have used the dislocation from ‘Liberation Day’ as a way of stimulating trade arrangements amongst themselves at a formal or informal level. A flurry of trade deals, including ‘maxilateral’ agreements such as EU-Mercosur; bilateral deals such as UK-India; and ‘minilateral’ deals such as the GCC-ASEAN[32]—are blossoming. Given the statistically positive correlation between openness to trade and boosting productivity and economic growth,[33] this will generate new ‘winners’ at the macroeconomic and country-specific level, for long-term asset allocation in real estate.
In terms of real estate ‘food groups’ (that is, sub-asset classes of residential, industrial, office, retail, and hospitality), this also carries with it specific implications for logistics. Namely, the re-shoring play in onshoring domestic manufacturing is not necessarily a uniform movement towards localisation. On the contrary, it is evident that the experience of sustained shocks to global supply chains—whether from the initial trade tensions of 2018, the COVID-19 pandemic, Russia’s invasion of Ukraine, and most recently, the Iran war—have not forced a wholesale onshoring of critical processes. Rather, these shocks to critical resources, materials, and inputs have underscored a greater diversification of supply chain activity. For example, with the Hormuz closure, India is now importing fertiliser from Indonesia to make up for lost supply from the Gulf; and Japan is importing plastics from China. Moreover, a deepening of the ‘just in case’ vs ‘just in time’ manufacturing capabilities, with companies bidding up multiple contracts, can also lead to a structurally higher price environment for many key inputs (including building materials).
What all of this means is that logistics, warehousing, and cold storage facilities—as well as wider infrastructure projects, including ports—will likely be bright spots for investing, across multiple jurisdictions. Even as governments work to pursue various forms of instilling ‘resilience’—introducing an equivalence between national security and economic security—some industries may be onshored, and others may continue to rely upon critical inputs from other jurisdictions. At a cross-country level, the cementing of additional economic, mineral, and resource corridors such as the India–Middle East–Europe Economic Corridor (IMEC) will also likely enhance opportunities in logistics across jurisdictions. Moreover, expenditure on infrastructure by governments and multilateral development banks, such as in Europe (resulting from the Savings and Investment Union); or in certain emerging market/developing economies (EMDEs), like Vietnam;[34] or in India with prospective financing from the World Bank and the Asian Development Bank,[35] may also create positive spillover effects for real estate portfolios. Optimising performance for these assets with AI-boosted real-time data analytics and other prop tech investments can also pair well with such logistics assets. Global investors and fund managers may also be at an advantage here, in the ability to disseminate what works in terms of performance across a wider geographical distribution of assets.
Geographical Asset Allocation
For both quantitative and qualitative reasons, investors (including real estate fund managers) have started to look beyond the US for opportunities for long-term value creation. Frothy valuations, policy shifts, and a softening dollar for much of 2025 have prompted the ‘great diversification’, of capital being ‘pushed’ from the US and ‘pulled’ towards other jurisdictions, from Europe to Japan, and from Latin America to India.
Growth prospects in some of these countries are underpinned by the deepening of trade ties, and in the case of Asia, greater trade regionalism. The designation of certain safe haven assets has also started to shift, and some of this changing calculus has been evident in the initial wake of the Iran war, with treasury yields holding steady early on in the conflict, and a relatively lackluster performance of the USD.
Capital likes stability—and investors need to know that they can exit an investment, at a specific time, at fair market value. In the quest for relative certainty, investors have started to reprice risk premia for certain markets. For some fixed income investors, record high levels of government debt within some advanced economies (AE) and the practice of fiscal rectitude in some EMDEs has spurred a rotation out of AE debt.[36] While the fundamentals of many EMDEs, particularly those in Asia are strong and equity markets have outperformed peers in AEs, government debt in these EMDEs is arguably still undervalued. Softer pricing in public markets is also likely to open up a strong opportunity for real asset investors in such jurisdictions. Additionally, real estate markets within AEs in the Asia-Pacific region—spurred by many of these minilateral and maxilateral trade agreements—also hold promise, including Singapore and Japan.[37]
Demographics: Agglomeration, the Future of Cities, and Climate Change
The economic realities of declining birth rates (a feature of both advanced and emerging market/developing economies or EMDEs), ageing populations, the acceleration of automation in the world of work, and rising entitlement spending do not immediately imbue a sense of enthusiasm or optimism about investing in the next generation of long-term assets in the built environment. However, despite the backdrop of slowing structural growth, catering to maturing populations in dynamic cities still portends a promise of generating steady yields and building capital values over the long-term—especially amidst the pursuit of longevity.[38]
The reasons behind falling birth rates are myriad and interrelated. Within many advanced economies, shrinking fiscal purses, record high levels of government debt, and shortfalls in public pensions contribute to a ‘deflationary mindset’ for many young people, who opt out of having children.[39] And, like the proverbial chicken-and-egg, shrinking workforce populations channel less revenue into government coffers, which further reinforces this structural drag on sentiment. Moreover, in a vicious cycle of expanding debt and slower economic growth, rising entitlement spending on ageing populations with longer life-spans can also crowd out investment into infrastructure, which, in turn, can undermine productivity and quality of life within societies.
Within some EMDEs, female education has also played a role in declining birth rates. In Bangladesh, a closely studied government programme of providing free education for girls has had meaningful downward pressure on fertility.[40] In both advanced as well as EMDEs, recent research also attributes declining teen birth rates to the ubiquity of smartphones and the pervasive use of social media,[41] which has replaced erstwhile in-person human interactions. Also, across developed and emerging economies, a continued crisis of affordability of housing has been recently correlated with declining fertility rates amongst the younger segment of the population.[42]
Real Estate and Social Infrastructure: Part of the Solution
What all of this may mean is that real estate can be part of the solution. By breaking ground or updating much-needed social infrastructure projects—including student, senior, and affordable housing—developers can offer a private response to a public problem which impacts every segment of our society. For students, undergraduate enrollment numbers have been steadily increasing over time[43]—and certain country-specific dynamics, such as swelling international numbers in Italy, or leaving the parental home on a relatively earlier basis, in France[44]—have led to strong growth prospects for student housing in certain countries, as investments that offer a steady, long-term yield.[45] Senior housing—a mature market in the US—has also taken off in pockets of Europe in the past few years, such as in France where the ‘papy boom‘ is steadily garnering capital to match growing demand.[46]
Figure 1: Senior Service Residences in France (No. of Facilities)
Source: ImmoStat, Les Echos[47]
By supporting a basic need of different parts of the demographic spectrum, developers and end investors of both student and senior housing can be seen to be allocators of social infrastructure, enhancing growth and quality of life in the jurisdictions and municipalities in which they operate.
The Future of Cities: Agglomeration, Innovation, and the Littoral Sense
Much ink has been spilled on the future of cities in our shock-prone and digitising world. The COVID-19 pandemic was meant to sound the death knell of the megacity and prompted real estate investors from Connecticut to Cologne to deploy capital to ‘secondary cities’ and to suburban areas, kitting out residential and office buildings in the wake of a supposed exodus from dense urban areas. And yet, economic and social history tells us that after every shock, the city remains triumphant.
Part of the reason for this is what American economist Edward Glaeser refers to as ‘agglomeration’: that is, as people from across industries ‘agglomerate’ and cluster in dense urban areas, prospects for productivity and economic growth are enhanced.[48] Cities also serve as incubation labs for innovation: a statistically significant positive correlation between patent creation and urbanisation[49] highlights the extent to which future economic growth can be wrapped up in cities. The current ‘gold rush’ of AI and the vivification of San Francisco is a case in point. In Frisco, the combination of a tech boom—coupled with dynamic municipal leadership is magnetising patient pools of real estate capital across the real estate spectrum into hospitality, office,[50] and residential assets. Indeed, the median house price in San Francisco just reached a historic high of US$2.15mn,[51] over five times the national average.[52] Thus, even amidst ‘automation anxiety’ and the fear that the growth in AI deployment will displace jobs, human density remains closely linked with economic growth, as well as price appreciation in the built environment (which may be further enhanced in geographically constrained cities such as San Francisco or New York).[b]
The potential for a deepening agglomeration effect and cascading opportunities for real estate investing is evident across both advanced and EMDEs alike. As Figures 2a, 2b, 2c, and 2d show, the experience of the COVID-19 pandemic did nothing to dispel the mythical status of the city. Rates of urbanisation have steadily increased in countries from Brazil to China to Japan.
Figures 2a, 2b, 2c, 2d: Urban Populations in Select Countries (% of Total Populations)
Source: World Bank[53]
For real estate investors in advanced economies, catering towards enhancements of liveability in mature urban areas will present opportunities across the asset class. Beyond living and working in cities, playing—in the form of sporting events, hospitality, and experiential retail—merit a close look. Strong commitments to enhance liveability by forward-thinking municipal authorities will also likely create opportunities for mixed-use developments in reimagined urban areas—such as that of the mayoralty of Neuilly-sur-Seine in France, and the redevelopment of La Défense.[54] Consider this opportunity set as asset alchemy, as opposed to greenfield construction.
And in some EMDEs, lower but compounding rates of urbanisation (compare Vietnam at 40.2 percent and India at 37 percent,[55] vs Japan at 92 percent) will likely present opportunities to engineer solutions for cities that are moving along the development curve. Keeping a finger on the pulse of governments with fiscal space to support local development, combined with strong private sector investments in infrastructure, will be natural criteria for selecting new markets. For example, Vietnam’s recent stimulus package, as well as continued investments by Japanese trading houses into transforming Hanoi and Ho Chi Minh City into smart cities,[56] have acted as a multiplier effect for new multifamily and hospitality developments.[57]
And, as with most densely populated areas, affordability will remain an arena of acute focus. Steady rates of urbanisation in geographically constrained areas, global capital flows and a preference for growing real estate portfolios, flourishing tourism, and inefficient regulatory practices at a local level are all contributing factors to a persistent crisis of affordability in many cities around the world. Added to that, a simple fact is that services jobs to support the amenities that make cities magical will need to be filled by people living near their place of work. Developing low- and middle-income—or attainable—housing expect to present natural opportunities for real estate developers to generate steady income for long-term investors, as well as to contribute to the means to live a dignified life for essential workers in our cities of the future.[58]
GDP, Coastal Cities, and the Littoral Sense
A final theme to consider regarding the relationship between economics, demographics, and investing in the built environment is the extent to which gross domestic product (GDP) growth is interlinked with coastal cities. In the case of the US, its coastal cities produce US$10tn worth of goods and services on an annual basis[59]—this, despite an increase in frequency and severity of storms, wildfires, and sea-level rise on the Pacific, Atlantic, and Gulf coasts.
The correlation between GDP growth and coastal cities spans the course of economic history. From Athens and Sparta and from Byblos to Beirut, cities have been storied atop maritime routes of trade and commerce. Expanding the definition of coastal to littoral, it is not just seas and oceans but the shores of rivers and lakes are also home to some of the world’s most vibrant cities, including Paris, Bangkok, Montreal, and Chicago. (One body of research points to the specific soil and silt composition in the Ile de France as a main factor of why people have been magnetised to Paris over the centuries.[60])
Again, despite the increase in the frequency and intensity of storms, including hurricanes, and extreme flooding and the adverse effects of sea-level rise (SLR), people continue to agglomerate to coasts. In the US, the number of people living on coasts has increased by 46 percent between 1970 and 2020. Perhaps it is worth pointing out that even inland communities near rivers are not immune to climate change: recent flooding in the Hill Country of Texas, US, and the Emilia-Romagna region of Italy caused significant economic loss, beyond the human tragedy.
This is one way in which AI can be helpful to municipal authorities governing regions affected by climate change: GovTech and the sharing of solutions to manage what works for SLR mitigation can be easily transmitted and adapted to different geographies by AI. This might be one of the Netherlands’ most powerful services exports: the experience and know-how of adapting to changing water levels in cities such as Rotterdam over centuries underpins the work of a recent Dutch delegation to flood-affected areas in Florida and Texas.[61]
Recognising the long-term trend of agglomeration to cities, to coastal communities, and the inevitable increase of extreme weather events related to climate change, again, real estate can be part of the solution. Innovation in building materials is one such arena. By investing in R&D and deploying different types of construction materials—such as bamboo,[62] cross-laminated timber,[63] and triple-coated, low emissivity glass[64]—real estate developers can reduce emissions in production, as well as generate more efficient types of newbuild construction or retrofittings which can help with insulation, controlling sunlight, thereby boosting energy at the asset level. Keeping an accurate read on data of power consumption and energy saved will likely become a critical component of asset operations on the ground. Whether or not this is mandated by a regulator,[65] it could be a distinguishing factor for smart asset managers going forward and will help indicate pathways towards establishing greater climate resilience.
Conclusion: Navigating the Populist Impulse
This report has unpacked the various dynamics of real estate, including record levels of government debt; supply shocks and stickier inflation in some jurisdictions; a higher for longer interest rate environment; and the resilience of global trade (even despite strong headwinds). Investors will therefore need to be wary of the populist impulse in the markets in which they operate. Comparatively faster rates of growth within certain economies—and deepening wealth inequality within some countries—may lead to a perception of inequality. As the world has witnessed over the past decade, the populist impulse is all too likely to emerge. This may mean that as stewards of the built environment, real estate investors and developers can be caught in the crosshairs of such policy shifts.
Shifts in taxation may be a primary channel for such moves: however, with affordability as a hot-button issue in many jurisdictions, even developers and investors engaged in the provision of lower- and middle-income housing may be caught off guard by market intervention. It is crucial to note that this can happen on both sides of the party spectrum, both left and right. Therefore, the ability to keep a clear, cohesive, and extensive modelling programme—on the ways in which such investments contribute to local economic growth, both directly and indirectly, over the lifespan of the asset—should be of paramount importance going forward.
For fund managers and investors in social infrastructure assets supporting the shifting demographic realities—such as student and senior housing—this may be a straightforward task. After all, such infrastructure investments, whether in the form of public-private partnerships or outright private investments, can often take a burden off overstretched or shrinking government purses. For investors in hospitality, retail, sporting, and mixed-use development, there may be a quality of life enhancement to be tabulated as well, which would entail a different measure of progress than a strict calculation of GDP.[66]
Crucially, in societies where both established households and investors early on the experience curve start to dedicate more of their portfolio to real assets, the ability for fund managers to calculate the ways in which this actually boosts household wealth, and therefore potentially consumptive power across the economy, will be a shrewd data set to keep on hand. With the power of private and patient capital underpinning productive assets in our societies, real estate developers and fund managers can communicate the ways in which the underlying assets, as well as yields, can generate long-term value and growth across a wider segment of the population.
Alexis Crow is Partner and Chief Economist of PwC, US. She is a Senior Fellow with the Observer Research Foundation and Columbia Business School.
All views expressed in this publication are solely those of the author, and do not represent the Observer Research Foundation, either in its entirety or its officials and personnel.
Endnotes
[a] Private pensions in the EU are 10x the value of those held in the US.
[b] This pattern may be further enhanced in geographically constrained cities such as San Francisco or New York.
[1] Robin Wigglesworth, “Will the Death of US Retail Be the Next Big Short?,” July 16, 2017, https://www.ft.com/content/d34ad3a6-5fd3-11e7-91a7-502f7ee26895?syn-25a6b1a6=1.
[2] Alena Botros, “The $500 Billion ‘Office Real Estate Apocalypse’: Researchers Find Remote Work’s Effect Even Worse Than Expected | Fortune,” Fortune, May 25, 2023, https://fortune.com/2023/05/25/office-space-crash-harder-than-expected-remote-work-economy-cre-crash/.
[3] Hoya Capital, “Everyone Hates REITs – a Contrarian Opportunity,” Seeking Alpha, December 15, 2025, https://seekingalpha.com/article/4853289-everyone-hates-reits-contrarian-opportunity.
[4] Harriet Clarfelt et al., “Iran War Could Prompt Federal Reserve to Raise Rates, Pimco Says,” 2026, https://www.ft.com/content/ba919246-ff50-4b8d-931c-43ee8d37795d?syn-25a6b1a6=1.
[5] George Lee, Lucas Greenbaum, and Goldman Sachs Global Institute, “Tracking Trillions: The Assumptions Shaping the Scale of the AI Build-Out,” 2026, https://www.goldmansachs.com/pdfs/insights/articles/tracking-trillions-the-assumptions-shaping-scale-of-the-ai-build-out/GS_Apr_GSGI_Tracking_Trillions.pdf.
[6] Jack Kelly, “Great Wealth Transfer: How the $90 Trillion Windfall for Millennials Could Change the Job Market and Economy,” Forbes, March 4, 2024, https://www.forbes.com/sites/jackkelly/2024/03/01/great-wealth-transfer-how-the-90-trillion-windfall-for-millennials-could-change-the-job-market-and-economy/.
[7] PricewaterhouseCoopers, “Private Markets in 401(K) Plans: The $1T Opportunity: PwC,” https://www.pwc.com/us/en/industries/financial-services/library/private-markets-401k-defined-contribution.html?WT.mc_id=TC3-PL300_US_04FY26_AW_PM_DM_PM_XB-XBR_XLOS-FW_FS-401K-GOOGLE&gclsrc=aw.ds&gad_source=1&gad_campaignid=23758553990&gbraid=0AAAAApf7eIgn35DlrOIHd7qyXaebO9Rdx&gclid=CjwKCAjwn4vQBhBsEiwAq3hhN2qQcXftcVR1qaTbOfU13L_fKLiaMzO8tWtrbplggvAOZh6Lz6sgYxoCjNEQAvD_BwE.
[8] “Multi-Asset Management Across Public and Private Markets | Milken Institute,” Milken Institute, May 4, 2026, https://milkeninstitute.org/content-hub/event-panels/multi-asset-management-across-public-and-private-markets.
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