CRE Secondaries Market Gains Ground Amid Liquidity Crunch

The global CRE secondaries market reached $24.3B in 2024, driven by rising investor demand for liquidity.
GP-led deals made up 65% of transactions, as general partners seek to extend ownership and recapitalize assets.
Investor redemptions and frozen capital have made secondaries a vital tool for accessing cash.
Participation is widening beyond large institutions to include operators and niche asset managers.

Key Takeaways

A Liquidity Lifeline

Real estate investors have struggled to access their capital, and the secondaries market has stepped in as a critical source of liquidity, per Bisnow.

Once considered a niche part of CRE finance, real estate secondaries, where equity interests are sold without changing the operator, are now gaining serious traction.

According to a new CBRE report, global secondaries transactions reached $24.3B in 2024, up from $23.4B in 2023. US deals accounted for $8.6B, showing strong domestic activity despite limited market transparency.

GPs Take the Lead

General partner-led (GP-led) transactions are now the fastest-growing segment of the market. These deals allow GPs to recapitalize existing assets, extend timelines, or reset business plans.

In 2024, GP-led deals made up 65% of global secondaries activity, a major shift from previous years, when limited partner (LP)-led deals dominated.

“These transactions help GPs unlock liquidity for investors and extend ownership without selling assets at a discount,” said Kilian Toms, Managing Director at CBRE Investment Management.

This rise comes as CRE owners face challenges: rising interest rates, geopolitical tensions, and weaker office demand have made it difficult to sell assets at fair value. Many deals have stalled as a result.

Investors Want Out — Fast

Amid the turmoil, investors in open-end funds and nontraded REITs tried to redeem capital. But fund managers, including Blackstone and Starwood, began limiting withdrawals in late 2022.

Although most redemption backlogs have eased, Starwood Real Estate Income Trust still had about $1B in pending requests as of early October.

With traditional exit options limited, many investors are turning to the secondaries market instead. In response, the market is evolving, offering more flexible deal structures and attracting a broader range of participants.

Why It Matters

The growth of the secondaries market signals more than a temporary trend. It marks a shift in how capital moves through the real estate sector.

Secondaries offer mid-hold liquidity for investors and give GPs more time to maximize asset value.

Concerns about transparency, especially in private markets, haven’t stopped growth. A 2024 CFA Institute survey found that valuation clarity, fees, and performance reporting remain key issues. But despite those concerns, transaction volumes continue to rise.

“The market’s expansion reflects how fragmented real estate ownership has become,” said Toms. “From large fund sponsors to small operators, more groups are using secondaries to manage liquidity.”

What’s Next

Expect the secondaries market to continue growing in 2025. As more investors seek flexibility in a tighter capital environment, secondaries are shifting from a backup option to a central strategy in commercial real estate finance.