Real Estate Secondary Market

At a Glance

• The real estate secondaries market continued its strong growth in 2025, reaching a record $20.3 billion in total volume.
• This strong growth was driven by structurally rising demand for liquidity solutions across private real estate, stabilizing valuations, and improving real estate fundamentals.
• In 2025, transactions led by general partners (“GPs”) rose to $14.5 billion, representing a 60% increase over 2024, accounting for 72% of the total market volume. This level is consistent with the post-COVID five-year average of 67%.

The real estate secondaries market continued its strong growth in 2025, reaching a record $20.3 billion in total volume. This strong growth was driven by structurally rising demand for liquidity solutions across private real estate, stabilizing valuations, and improving real estate fundamentals.

In 2025, Ares Secondaries Group recorded 189 real estate secondaries transactions representing $20.3 billion of net asset value (“NAV”), that closed or were placed under contract. This new high-water mark in both transaction count and NAV surpassed the previous 2024 records of 163 transactions and $14.6 billion of NAV by 39% and 16% respectively.

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GP-led Volumes Surged 60% Driven by the Continued Broad Adoption of Liquidity Solutions
In 2025, transactions led by general partners (“GPs”) rose to $14.5 billion, representing a 60% increase over 2024, accounting for 72% of the total market volume. This level is consistent with the post-COVID five-year average of 67%. The market volume has expanded at an average rate of 25% year-over-year since 2019, driven by the sustained adoption of continuation vehicles, fund recapitalizations and other GP-driven liquidity solutions as sponsors look to extend duration, generate liquidity for investors, raise capital to finish business plans, and/or retain control of outperforming assets. Several large-scale transactions exceeding $500 million accounted for 20% of the total GP-led volume in 2025. These scaled transactions were concentrated in several sectors, including senior housing, multifamily, and data centers. These sectors saw demographic tailwinds and strong secular demand throughout the year. The overall mix and scale of deals underscore the depth of the GP-led opportunity and the continued expansion of sponsor-driven secondary solutions across operationally intensive and growth-aligned sectors.

LP-led Transactions Volumes are Poised for Significant Growth as Pricing Optics Improve
Transactions led by limited partners (“LP”) represented 28% of the total 2025 volume, increasing from $5.3 billion to $5.8 billion. Within those activities, open-end core and non core funds (value -add and opportunistic) comprised 47% and 53% of volume, respectively. Open-end core fund transaction volume moderated to $2.65 billion, down 2% from $2.7 billion in 2024, reflecting a normalizing market in which discounts have compressed to single digits for many trades.

Transactions in value-add and opportunistic funds totaled $3.1 billion in 2025, an 11% increase from 2024 and the highest since 2018. This was driven by investors looking to generate liquidity, as fund distributions are at a 10-year low. As of the end of the third quarter of 2025, the rolling annual sum of quarterly distributions across global real estate funds as a percentage of NAV is at 7%, about a third of the 10-year average.

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Several larger scale transactions—exceeding $100 million in size—by insurance companies, endowments, foundations, and family offices contributed to these volumes, including one transaction over $500 million involving funds managed by a single GP. Notably, LP-led activities in value-add and opportunistic funds increased in the latter half of the year as pricing discounts improved marginally for select funds, reflecting improving fundamentals. Looking ahead, we expect improving discount optics to unlock pent-up liquidity demand from LPs who want to address liquidity and/or portfolio management objectives.

Overall, in 2025, U.S.-weighted partnerships accounted for 59% of total volume, followed by European-weighted partnerships at 37% and Asia-weighted at 4%. Outside of GP-led fund and portfolio recapitalizations, insurance companies, U.S. pension plans, and asset managers were among the most active sellers, representing 10%, 5%, and 3% of volume, respectively. Sellers based in the U.S. remained the most active at 57% of total volume, with Europe at 33% and Asia at 9%.

2026 and Beyond
With global direct real estate volumes still down 34% from 20211 and real estate fund distributions at a 10-year low, the need for liquidity solutions across LPs and GPs remain very high. We anticipate real estate secondary volume to continue to experience substantial growth, with volumes likely doubling over the next several years as the secondary market helps to unlock liquidity across the more than $2 trillion of NAV held in closed-end private real estate funds and non-fund vehicles such as joint ventures, co-investment vehicles, and others.

A Note on Methodology: The Ares' Real Estate Secondaries team aggregates annual transaction volume every year. The team keeps a proprietary database of each transaction that it becomes aware of and evaluates on an annual basis which deals have been consummated.

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1. Source: CBRE. Data as of December 31, 2025

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Past performance is not indicative of future results.