Top Real Estate Private Equity Investments for Accredited Investors

Real estate has been a cornerstone of wealth creation for millennia. Ancient empires and modern enterprises have been built on a foundation of land and real estate holdings—a winning combination of real-world assets, capital appreciation, and reliable passive income.

However, while traditional real estate will never go out of style, private equity in real estate has emerged in recent years as one of the most compelling alternative investment strategies for discerning investors.

For accredited investors, in particular,real estate private equity offers advantages that traditional assets rarely can, such as institutional-level management, attractive risk-adjusted returns,and uncorrelated diversification.

Are you an accredited investor considering your next move in alternative assets? In this guide, we explore the top private equity real estate investment options, detailing their strategies,structures, and benefits.

What Is Real Estate Private Equity?

Real estate private equity (REPE) refers to debt-based investment strategies where capital is lent to real estate sponsors, developers, or operators, rather than acquiring equity in the property. These funds are typically structured as limited partnerships, where the sponsor or general partner (GP) manages the fund and accredited investors serve as limited partners (LPs).

Unlike publicly traded real estate investment trusts (REITs), REPE investments are not listed on stock exchanges.That means they are significantly less liquid than their REIT counterparts. This illiquidity comes with potential benefits, such as access to off-market deals, reduced volatility, and exposure to commercial assets that would other wise be difficult to reach.

Benefits of Real Estate Private Equity

For accredited investors, private real estate equity presents a compelling way to gain exposure to the real estate market while generating fixed income streams and prioritizing capital preservation. Key benefits include:

●    Access to Institutional Assets: REPE funds open the door to high-value commercial real estate—like multifamily housing,industrial logistics centers, and medical office buildings—typically inaccessible to individual investors. By pooling capital, limited partners gain proportional ownership in deals once dominated by institutional capital.

●    Portfolio Diversification: REPE strategies are largely uncorrelated with public equities and fixed income. Because returns on private credit are driven by contractual interest payments rather than market speculation, it can act as a stabilizing force during periods of equity market volatility.

●    Tax-Advantaged Cash Flows: Accredited investors in REPE benefit from favorable tax treatment, including depreciation deductions, 1031 exchanges, and, in some cases, opportunity zone incentives.These tools can reduce or defer taxable income while supporting long-term compounding and growth.

●    Strong Historical Performance: Historically,private equity real estate has consistently delivered solid returns,particularly during periods of inflation. Asset-backed income (like rent) tends to rise with inflation, while appreciation in property values contributes tototal return over time.

Types of Private Equity Real Estate Investments

Private equity real estate opportunities span a broad range of strategies, each offering a different blend of risk,return, and liquidity. Understanding the four primary types of REPE options is key to aligning your investment objectives with the right opportunities.

1. Core Strategies

Core strategies are the“meat-and-potatoes” REPE option. They focus on high-quality, income-generating properties that are either new or recently renovated, and in prime locations. Investors won't have to worry about the credit worthiness of their tenants, who will likely be on long-term leases. The primary goal of core strategies is to deliver steady cash flows.

●    Asset Type: Stabilized, Class A properties

●    Risk Level: Low

●    Target Return: 6% to 10% annually

●    Typical Assets: Trophy office buildings,luxury multifamily in major metros, etc.

●    Investor Profile: Conservative; prioritizes income and capital preservation

2. Core-Plus Strategies

Core-Plus builds on the core foundation with slightly more risk and reward. Properties may have minor inefficiencies like light renovations, tenant turnover, or management upgrades that, if addressed, could enhance returns. Returns are a blend of income and modest appreciation.

●    Asset Type: Well-located assets with moderatevalue-creation potential

●    Risk Level: Low to moderate

●    Target Return: 8% to 12% annually

●    Typical Assets: Suburban offices, stabilizedbut aging multifamily, etc.

●    Investor Profile: Seeking income with moderategrowth

3. Value-Add Strategies

Value-Add strategies target underperforming or mismanaged properties that need substantial improvements. Returns are driven by active intervention—think renovations, operational restructuring, or leasing efforts—that increase an asset’s market value.

●    Asset Type: Undervalued properties that require repositioning or rehab

●    Risk Level: Moderate to high

●    Target Return: 12% to 18% annually

●    Typical Assets: Vacant or outdated commercial buildings, turnaround multifamily, etc.

●    Investor Profile: Growth-oriented withmoderate risk tolerance

4. Opportunistic

Opportunistic deals sit at the far end of the risk-return curve. These include ground-up developments, distressed properties, and assets in emerging markets. They tend to require longer timelines, deeper expertise, and carry higher leverage—as well as the highest potential returns.

●    Asset Type: Ground-up revelopment projects,complex repositionings

●    Risk Level: High

●    Target Return: 18%+ annually

●    Typical Assets: Hotels, new construction,emerging locations, etc.

●    Investor Profile: High risk tolerance and long investment horizons

Top Real Estate Private Equity Investment Vehicles

Accredited investors can access private real estate through several vehicles, each with distinct features, liquidity profiles, and levels of investor involvement. Understanding these structures is key to finding the right fit for your investment strategy.

Real Estate Syndications

Syndications are pooled investment structures where multiple investors combine capital to acquire commercial real estate, typically managed by a professional sponsor. This model allows passive investors to participate in high-quality deals without the burden of day-to-day property management.

●    Key Advantages: Preferred returns, hands-off ownership, and transparent reporting

●    Common Targets: Multifamily complexes,industrial assets, medical office buildings

●    Investor Profile: Seeking passive income with access to diversified, sponsor-led deals

Syndications offer access to projects that would otherwise be out of reach for most individuals and allow for geographic and sector diversification. If you want to learn more about real estate investment syndications, read our guide.

Private REITs (Non-Traded)

Private REITs operate similarly to their public counterparts—owning and managing portfolios of income-generating properties—but are not traded on public exchanges. This lack of daily pricing and market speculation often results in greater price stability.

●    Key Advantages: Consistent distributions,lower volatility, sector-specific exposure

●    Liquidity Profile: Limited liquidity; some funds offer periodic redemption windows

●    Investor Profile: Seeking passive exposure to institutional-quality real estate without public market correlation

Private REITs frequently focus on niche strategies, such as healthcare or logistics, and offer a relatively low entry point into institutional portfolios.

Closed-End Real Estate Funds

Closed-end funds raise a fixed amount of capital during an initial offering period and then invest that capital over a defined term, typically 7–10 years. These funds often pursue value-add or opportunistic strategies.

●    Key Advantages: Clear performance targets,aligned manager incentives, disciplined exit strategies

●    Liquidity Profile: Capital is locked in for the life of the fund

●    Investor Profile: Seeking higher, long-term returns from more active strategies

Fund managers are incentivized to deliver strong outcomes, as compensation is often tied to achieving specific performance benchmarks.

Direct Co-Investments

Direct co-investments allow investors to participate alongside institutional capital in specific property deals. Unlike pooled vehicles, co-investors select individual opportunities, offering more control and transparency.

●    Key Advantages: Enhanced visibility, reduced fees, greater control

●    Engagement Level: Requires more diligence and decision-making

●    Investor Profile: Sophisticated investors comfortable with hands-on evaluation

The direct approach is ideal for more sophisticated investors looking to customize their exposure or gain deeper insights into individual deals that offer potentially higher net returns due to fewer costs from middlemen.

Sectors with High REPE Potential

Not all real estate is created equal. Within private equity real estate, certain sectors stand out for their resilience, growth prospects, and alignment with long-term demographic and economic trends.

Multifamily Residential

Multifamily housing has long been the real estate private equity gift that keeps on giving. Thanks to its relative affordability and progressive urbanization—alongside changing renter preferences and rising homeownership costs—multifamily seems to always be in demand.

Rents for multifamily housing have gone up steadily over time, especially in under supplied markets, providing reliable income streams and appreciation. In Q1  2025, nearly 102,000 units were absorbed—up from 12%in Q1  2024, compared to the pre-pandemic average of around 73,000 units,reflecting strong rental demand.

Industrial and Logistics

Fueled by the ongoing e-commerce boom and the growing near shoring movement, demand for logistics space has soared since the pandemic. Hot property types include “last-mile” distribution facilities near urban centers that help ensure fast delivery, attracting premium rents.

Notably, the U.S. industrial sector has delivered 60 consecutive quarters of positive net absorption, with the national vacancy rate hovering around 6.8–6.9% into 2025. Investors benefit from long-term leases with credit tenants, providing both stability and upside.

Medical Office Buildings (MOBs)

MOBs are gaining attention due to the healthcare sector’s non-seasonal, always-in-demand nature. In 2024, average triple-net asking rents for MOBs reached $24.70 per sq ft, up 1.3% on ayear-over-year basis. MOB vacancy rates have also fallen as rents keep rising.

As the U.S. population ages, the demand for accessible medical services will only continue to grow. These evergreen properties often lease to creditworthy tenants with long-term contracts.

Self-Storage

A pandemic darling, self-storage investments are relatively recession-resistant and have been growing in popularity. These commercial properties typically come with low operating costs and high margins, particularly in high-density or transitional neighborhoods.

Nationwide, U.S. self-storage facilities average 91.6–96.5% occupancy, with approximately 52,300 facilities operating across the country in 2024. As more people downsize, relocate, or decide to keep renting, the demand for storage will continue to rise.

Evaluating Real Estate Private Equity Funds

If you’re thinking about investing in real estate private equity funds, do your due diligence first.  Not every deal is created equal.

A great first step is reviewing the REPE manager’s history. Make note of how many funds they’ve launched. Assess the assets under management (AUM) and previous performance. If they have a proven track record across market cycles and are known for open communication, you’re likely off to a good start.

Be wary of hidden or layered fees and make sure you scrutinize anything that stands out, in any way, for any reason. Not all fee structures are created equal, either. You should expect:

●    Acquisition fees: 1% to 2% of purchase price

●    Asset management fees: 1% to 2% of assets under management

●    Success fees: 20% of the return on investment after investors receive a preferred return.

Most funds require minimum investments between $50,000 and $250,000. These are long-term commitments (often 5–10 years) with limited secondary market liquidity, if any. Make sure you understand all liquidity provisions and are comfortable with whatever capital you invest being tied up for the projected lockup period.

How diversified is this fund, anyway? What is its geographic and/or asset mix? All of this plays into its risk profile. Whatever the case, make sure the fund is not over-leveraged. Conservative leverage, typically below 65%, is a good indicator of prudent capital structure.

Finally, ask about the fund’s exit strategy, and make sure it’s clear and can account for sudden market shifts.

Tax Advantages of Real EstatePrivate Equity

Executed correctly, REPE investments can offer significant tax benefits—particularly compelling for accredited investors seeking to enhance after-tax returns:

●    Depreciation deductions: One of the most powerful tax tools in real estate investing is depreciation. Even when a property appreciates in market value, the IRS allows investors to depreciate the asset over time, which reduces taxable income. This often results in"paper losses" that offset gains from rental income.

●    1031 exchanges: Named after Section 1031 of the Internal Revenue Code, these exchanges allow investors to defer capital gains taxes by reinvesting the proceeds from a property sale into another qualifying property. This strategy supports long-term wealth accumulation and portfolio optimization.

●    Opportunity zone incentives: Enacted as partof the 2017 Tax Cuts and Jobs Act, opportunity zones provide tax deferrals and potential tax forgiveness on investments in designated low-income areas. Investors can roll capital gains into Qualified Opportunity Funds (QOFs) andreceive significant tax breaks if held for 5 to 10 years.

●    Passive income tax treatment: Income generated through private real estate investments is typically classified as passive income, which can be offset with passive losses. This is particularly useful for high-income earners with other passive investments.

●    Bonus depreciation and cost segregation: Advanced strategies like cost segregation studies allow for accelerated depreciation schedules on parts of a building, enabling larger deductions early in the investment's life. With recent bonus depreciation rules, investors can deduct a significant portion in the first year.

Of course, you should always consult a tax professional to help you tailor these strategies to your unique financial situation and goals.

How HUDSONPOINT capital Can Help

Top real estate private equity investments offer accredited investors the chance to diversify, enhance returns, and build wealth through hard assets with institutional oversight. While not without risks, the potential upside is substantial, particularly when entering deals through experienced sponsors and structured funds.

At HUDSONPOINT capital, we specialize incurating exclusive real estate private equity opportunities for accredited investors. Whether you're looking to build long-term wealth, generate passive income, or diversify from traditional markets, our team provides:

●    Access to institutional-grade private real estate funds

●    Thorough vetting and due diligenceof sponsors

●    Personalized portfolio construction

●    Ongoing monitoring and reporting

For more information on our current REPE opportunities, visit our real estate private equity page or contact our advisory team at HUDSONPOINT capital.

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