Where Institutional Capital Is Flowing in Real Estate for 2025–2026

Quick reads: Where institutional dollars are going (and not going) based on a review of 350 pensions. Real estate detail on page 10.

1. Cautiously optimistic

“The outlook for real assets allocations in the second half of 2025 and into 2026 is cautiously optimistic, with infrastructure expected to remain a leading destination for capital.”

2. Real estate = selective

“In private real estate, allocations are more selective.”

3. Income vs. risk

“Core and credit strategies will remain supported for their income and downside protection, while opportunistic real estate is starting to re-emerge—driven by distressed office, urban logistics, and asset conversions.”

4. Trusted relationships rule

“Activity is concentrated in trusted managers and targeted themes rather than broad risk-on exposure.”

5. Liquidity is the bottleneck

“…allocators are expected to stay disciplined and relationship-driven, with deployment influenced by public market performance, rate policy, and the pace of liquidity returning through secondaries and exits.”

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