Valuation Uncertainty For Family Offices in a Shifting Market

In today’s market, determining the value of real estate assets has become one of the most difficult challenges family offices face. Across the country, cap rates are behaving inconsistently, appraisals aren’t keeping up with market realities, and liquidity in high-end assets has dried up in places where it once seemed infinite. For family offices with long-term capital and a meaningful allocation to real estate, these valuation disruptions don’t just create noise. They directly impact planning, deal execution, and return expectations.

Yet even in the midst of this uncertainty, opportunities are emerging – particularly in multifamily and mixed-use sectors. These property types are showing resilience and long-term upside, offering a more stable footing in an otherwise unpredictable environment.

Cap Rate Confusion Across Asset Classes

Cap rates are no longer moving in a predictable pattern. In some urban cores, Class A multifamily properties have held steady or even compressed slightly due to limited supply and consistent rental demand. In contrast, office and retail assets in those same cities have experienced rapid cap rate expansion, driven by tenant risk and softening fundamentals.

In secondary and tertiary markets, the disconnect is even more pronounced. Some properties are trading at elevated cap rates, while others, often well-located multifamily, are commanding a premium due to strong demographic inflows and housing shortages.

This inconsistency is making traditional valuation models harder to rely on. For family offices that typically look for stability and long-term capital preservation, that lack of clarity can delay decisions or cause investment opportunities to be missed altogether.

Multifamily, however, is benefiting from a structural tailwind. With homeownership affordability at a multi-decade low, demand for rental housing has remained strong. In many cities, monthly rents have stabilized or resumed modest growth, even as other sectors are seeing compression. For income-seeking investors, this makes multifamily one of the few asset classes where cap rate expansion is being offset, at least in part, by consistent cash flow growth.

Lagging Appraisals and the Repricing Gap

Appraisals continue to trail actual market sentiment. In a volatile market, this creates friction in every direction. Buyers are wary of overpaying based on inflated past sales. Sellers are reluctant to accept today’s valuations, especially when their appraisals still reflect last year’s peak. Lenders are stuck in between, tightening underwriting and reducing proceeds.

This lag can stall refinancing, slow down acquisitions, and introduce risk into estate planning or asset reallocation. Family offices with direct holdings may find their internal valuations significantly at odds with what outside appraisers are reporting. When portfolio decisions are being made based on these figures, the stakes become very real.

Yet again, multifamily and mixed-use projects provide a bit more stability. Appraisers are generally quicker to adjust valuation assumptions in these segments because market comps are more frequent and pricing is more transparent. With higher transaction volume and shorter lease terms compared to office or retail, multifamily valuations tend to update faster to reflect reality.

For mixed-use assets, the combination of residential income and ground-floor retail or office space can create both upside potential and downside protection, especially when the asset is weighted more toward housing. These properties also tend to benefit from zoning advantages and urban planning incentives that are less available to single-use properties.

Illiquidity of Luxury and Trophy Assets

Luxury real estate, once viewed as a bulletproof store of wealth, has become far less liquid. Buyers for trophy assets are fewer, and many are waiting for discounts before making a move. Sellers are holding firm on price, creating a standstill. Financing for larger deals has also become more difficult, especially without institutional or international capital lined up in advance.

This leaves many family offices holding properties that may be beautiful on paper, but hard to sell without accepting a haircut. When these assets are part of a larger succession plan or are expected to provide liquidity for future investments, the timing mismatch becomes a liability.

By contrast, multifamily and mixed-use properties tend to trade more efficiently. The buyer pool is deeper, especially for stabilized assets under $50 million. These are often attractive to private equity firms, regional syndicators, and other family offices. In some cases, smaller assets can also be sold off individually to retail buyers, providing greater flexibility in exit strategy.

This liquidity advantage, coupled with ongoing rental demand, makes them well-suited for capital preservation and portfolio diversification. When the broader market is uncertain, the ability to move in or out of a position with confidence carries real value.

Positioning for What’s Next

Family offices that are navigating today’s valuation landscape must stay flexible and informed. This is not the time to rely solely on historical assumptions or spreadsheet logic. The market is changing fast, and decisions need to reflect real-time conditions – not outdated benchmarks.

That said, not all uncertainty is bad. It often creates the clearest pathways to opportunity. Multifamily and mixed-use real estate, with their recurring cash flows, broader demand base, and more responsive valuations, offer exactly that kind of opportunity. They aren’t immune to market shifts, but they are proving more resilient than most.

At a time when luxury assets are hard to price, office buildings are struggling with structural demand changes, and retail continues to evolve, family offices would do well to consider where capital can work the hardest with the least friction. Multifamily and mixed-use assets may not carry the same prestige as legacy estates or landmark commercial buildings, but they carry something else – momentum.

In a market where clarity is scarce, momentum can be a powerful compass.