Family Office Real Estate Strategy Adapts as Market Volatility Grows

Written by:

Steve Marcinuk

Date:

16 Apr 2026

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The commercial real estate market is facing heightened uncertainty, forcing investors to rethink established strategies. For family offices and high-net-worth individuals, this environment requires a distinct approach that diverges from the institutional playbook.

Andrew Lofredo, founder of CRE Vertical Advisors LLC, has spent three decades working across tenant representation, property management, legal counsel, and asset management. He now focuses exclusively on helping family offices and private investors navigate a market that is growing more complex and less predictable.

“Family offices have different objectives than institutional real estate or syndicators chasing an IRR,” Lofredo says. “Often, it’s a long-term or generational hold. The goals, the decision-making, and the execution all look different.”

Building Trust Through Integration

Lofredo’s career path reflects the varied skill set required to serve family offices effectively. He began in tenant representation, moved into property management, and attended law school at night to deepen his real estate expertise. While serving as Director of Asset Services at CBRE, managing 9 million square feet of office space, he saw firsthand that large institutions often fail to connect with the hands-on, entrepreneurial mindset of family office investors.

“There was a disconnect in how bigger companies approached the more granular, entrepreneurial work needed with family offices,” he says.

Seeking to bridge that gap, Lofredo joined family-owned real estate firms, learning to balance the discipline of institutional processes with the flexibility of entrepreneurial environments. When the COVID-19 pandemic hit in 2020, he was in the process of launching his own firm, but instead stepped in as CEO and General Counsel for a family office with a sizable retail portfolio.

“It was a tough time to start a company, but I had the chance to help a family office get through COVID,” Lofredo recalls. “We got to know the portfolio in detail and made daily decisions to keep things on track.” That family office became CRE Vertical Advisors’ first client, setting a precedent for a growth model based on referrals and deep operational involvement with clients.

Retail Resilience Defies Headlines

Despite widespread predictions of a “retail apocalypse,” Lofredo’s experience managing retail properties tells a different story. His portfolio has maintained 98% occupancy, challenging the narrative that retail is uniformly in decline.

“All retail isn’t the same,” he points out. “A neighborhood shopping center anchored by a grocery store is a very different investment than a traditional mall. Understanding those distinctions is critical.”

The tenant mix in his properties has shifted away from traditional soft-goods retailers toward businesses focused on experiences and services, such as quick-service restaurants, fitness studios, and education centers. In the past seven months, he has signed leases with three Pilates studios. Other new tenants include karate schools, physical therapy offices, dance studios, and music lesson providers—businesses that are less vulnerable to e-commerce competition.

This trend requires a different approach to property management. Service-oriented tenants have unique needs: dentists require more water than frame shops; gyms need showers and soundproofing; restaurants generate higher traffic and specific waste-management demands. Lease structures, building systems, and tenant mix strategies must adjust to accommodate these shifts.

Office Market

While many office markets face persistent challenges, Lofredo sees selective opportunities for patient investors. Class A and trophy office buildings continue to perform well, but Class B and C properties are now trading at steep discounts—a trend he calls a “basis reset.”

“There’s a window for those with patient capital who believe in the long-term office market,” he says. “You can buy at a discount and invest in infrastructure, but you need to be able to hold and reposition the property.”

This approach suits family offices, which are not pressured by quarterly reporting cycles and can afford to invest for the long haul. However, Lofredo cautions that not all discounted properties are worth the risk; some older buildings are now functionally obsolete and may not justify the investment required to reposition them.

Interest Rate Reality Check

Rising interest rates have fundamentally changed the economics of commercial real estate, especially for those used to refinancing at historically low rates.

“It was easy to look smart when you could borrow cheaply,” Lofredo says. “In 2022, I was closing commercial refinances in the threes. That’s no longer possible.”

This new reality complicates acquisition and disposition strategies for family offices, particularly when considering 1031 exchanges. Lofredo describes a recent situation where his team received an unsolicited offer on a property. “If we sell and pay off that low-interest loan, we have to redeploy the capital at much higher rates. That impacts the value of any deal,” he explains.

Long-Term Lease Implications

Commercial leases, which typically run from five to twenty years, amplify the impact of market uncertainty. Decisions made today can lock in rent terms for a decade or more, making it harder to adapt if the market changes.

“When you sign a long-term lease, both sides want contractual certainty,” Lofredo says. This impacts everything from tenant improvement allowances to how vacancies are managed. A small retail space may remain empty not due to a lack of interest, but because the economics must work for both the landlord and the tenant over a long lease term.

Strategic Evolution and Co-Investment

Looking forward, CRE Vertical Advisors is moving beyond traditional advisory work. The firm is launching a co-GP fund to invest alongside clients, aligning interests and giving family members direct access to new opportunities. “We see opportunities in the market,” Lofredo says. “We want to co-invest with our clients and put our own capital to work.”

This move reflects a broader trend among family offices: rather than passively managing inherited real estate, many next-generation members are actively seeking investments that align with their personal risk and return goals.

Implications for the Road Ahead

The current volatility in commercial real estate is forcing all investors to rethink assumptions, but family offices are uniquely positioned to benefit from this environment. Their ability to hold assets through cycles, make decisions without external pressure, and tailor strategies to specific properties gives them an edge as the market resets expectations.

For family offices, the challenge is to remain disciplined—focusing on properties and sectors where long-term fundamentals remain strong, and avoiding the temptation to chase bargains in areas facing structural decline. Success in the coming years will depend on a willingness to dig into the details, adapt to new tenant demands, and use patient capital to seize opportunities that may be out of reach for institutional competitors.

As the commercial real estate market continues to adjust, family offices that combine deep local knowledge with flexible, long-term strategies will be best positioned not only to preserve wealth but also to grow it—despite the uncertainty that now defines the landscape.

About the Expert: Andrew Lofredo is the founder of CRE Vertical Advisors LLC, with over 30 years of experience spanning tenant representation, property management, legal counsel, and asset management. He specializes in advising family offices and high-net-worth investors, helping them navigate complex commercial real estate strategies with a focus on long-term, generational value.

This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.