From Eyal Ofer to Amancio Ortega: Billionaires Shift Their Attention Towards Multifamily Investments

Traditionally, wealthy individuals have preferred to invest in office properties, which offer consistent income through long-term leases. However, the pandemic has cast doubt on the future of the office market. As a result, billionaires are increasingly turning their attention to the multifamily market, which has remained resilient.

A shift in the market: Investments in multifamily housing by ultra-wealthy individuals and their firms have more than doubled in the last ten years. This sector offers significant growth potential, given the decline in commercial property values and the persistent housing demand.

Some examples of billionaires who are investing in multifamily housing include:

• Eyal Ofer: Global Holdings Management Group, owned by Israeli billionaire Eyal Ofer, recently acquired a 56-unit building in Manhattan for $30.7 million. This purchase further augmented the firm's already substantial and expanding luxury multifamily portfolio.

• Amancio Ortega: Pontegadea, the family office of Amancio Ortega, founder of Zara, recently invested $232 million in one of Chicago's iconic apartment towers located in the West Loop. The firm acquired the 45-story, 492-unit luxury building at 727 West Madison Street from a joint venture of Ares Management and Skokie-based F&F Realty.

• David Rubenstein: David Rubenstein, co-founder of Carlyle Group, also mobilized funds to purchase apartment buildings. Back in 2022, a venture backed by Rubenstein raised over $240 million in order to invest in California, Pittsburgh and Charlotte, North Carolina, among other undisclosed deals. 

The shift by wealthy individuals from office buildings to apartment buildings is a reflection of the changing landscape of the real estate market. The multifamily sector is well-positioned to benefit from the sustained demand for rentals, especially in light of the current challenges in the housing market.