Key Takeaways
- • Real estate secondaries market reached record transaction volume in 2024 with 163 transactions representing $14.6B in net asset value, surpassing the previous 2022 record of 161 transactions and $12.4B NAV.
- • Mega-fund closings by tier-one managers signal institutional capital concentration: Goldman Sachs raised $3.4B (largest secondary fund ever), Ares closed a $3.3B fund, Blackstone closed $2.6B, and Neuberger Berman exceeded its $800M target with $1B+ for its Fund II.
- • Market momentum driven by three structural factors: persistent liquidity constraints in primary real estate markets, entry of new institutional players, and evolution of secondaries as an asset class creating discrete investment opportunities.
- • Commercial property valuation pressures and slow property sales activity continue forcing investors to exit positions before full fund liquidation, fueling secondary market supply and buyer demand simultaneously.
- • Secondary market relevance has shifted from cyclical to structural, with Madison International Realty's 20-year track record indicating the current moment represents an inflection point in market maturation.
Summary
The real estate secondaries market—the market for buying and selling stakes in existing real estate funds—has entered a sustained expansion phase with institutional capital driving record activity levels. In 2024, the market processed 163 transactions totaling $14.6 billion in net asset value, according to Ares Management data cited in the Bisnow report. This volume exceeded the previous high watermark of 2022, which recorded 161 transactions and $12.4 billion NAV, establishing a new baseline for market scale.
The acceleration in secondary market activity stems from the post-pandemic commercial real estate environment. Valuation pressure on commercial assets and reduced liquidity in primary property sales have created urgency for fund investors seeking capital exit before general partner-led liquidations occur. This dynamic has widened the gap between supply (investors needing liquidity) and demand (institutional capital seeking entry), creating a favorable market-clearing environment for secondary transactions.
Tier-one asset managers have aggressively committed capital to capture this opportunity. Goldman Sachs raised $3.4 billion for its real estate secondary fund in June 2024—the largest fund of its kind on record. Ares completed a $3.3 billion secondary fund in December 2023, while Blackstone closed a $2.6 billion vehicle in November 2023. Neuberger Berman exceeded internal targets for its NB Real Estate Secondary Opportunities Fund II LP, raising over $1 billion against an $800 million goal, representing a 48 percent increase over the prior vintage.
According to Madison International Realty Chief Investment Officer Carey Flaherty, the influx of institutional capital reflects three converging factors: structural illiquidity in primary markets, new entrants increasing competitive bidding for secondary positions, and market maturation that has broadened investment opportunity sets. Flaherty, whose firm has invested in real estate secondaries for two decades, characterized the current environment as a peak relevance moment—a cyclical high in secondary market utility relative to alternative deployment strategies.
The market's expansion indicates that real estate secondaries have transitioned from a niche strategy to a core institutional allocation vehicle, with mega-fund closings and record NAV volumes signaling sustained capital availability and deepening marketplace efficiency.
The acceleration in secondary market activity stems from the post-pandemic commercial real estate environment. Valuation pressure on commercial assets and reduced liquidity in primary property sales have created urgency for fund investors seeking capital exit before general partner-led liquidations occur. This dynamic has widened the gap between supply (investors needing liquidity) and demand (institutional capital seeking entry), creating a favorable market-clearing environment for secondary transactions.
Tier-one asset managers have aggressively committed capital to capture this opportunity. Goldman Sachs raised $3.4 billion for its real estate secondary fund in June 2024—the largest fund of its kind on record. Ares completed a $3.3 billion secondary fund in December 2023, while Blackstone closed a $2.6 billion vehicle in November 2023. Neuberger Berman exceeded internal targets for its NB Real Estate Secondary Opportunities Fund II LP, raising over $1 billion against an $800 million goal, representing a 48 percent increase over the prior vintage.
According to Madison International Realty Chief Investment Officer Carey Flaherty, the influx of institutional capital reflects three converging factors: structural illiquidity in primary markets, new entrants increasing competitive bidding for secondary positions, and market maturation that has broadened investment opportunity sets. Flaherty, whose firm has invested in real estate secondaries for two decades, characterized the current environment as a peak relevance moment—a cyclical high in secondary market utility relative to alternative deployment strategies.
The market's expansion indicates that real estate secondaries have transitioned from a niche strategy to a core institutional allocation vehicle, with mega-fund closings and record NAV volumes signaling sustained capital availability and deepening marketplace efficiency.
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