Why Smart CRE Investors Are Quietly Adding Alternatives in 2025

Where Capital Is Quietly Rotating in 2025

Commercial real estate investors are entering 2025 with a different mindset.

Rates remain elevated. Deal flow is selective. Underwriting is tighter.

And quietly, capital is rotating not away from CRE logic, but into assets that behave similarly.

This isn’t a retreat.

It’s a recalibration.

What We’re Seeing Across Institutional Portfolios

The most consistent shift we’re tracking isn’t where investors are exiting

it’s where they’re reallocating.

Across family offices, RIAs, and alternative funds, three themes keep repeating:

• Preference for illiquid, long-term assets

• Assets with low correlation to public markets

• Structures that allow fractional exposure without full operational risk

Sound familiar?

That’s the same thesis that built CRE portfolios for decades.

Beyond Buildings: The Expansion of Alternative Allocations

As CRE underwriting becomes more conservative, investors are broadening the definition of “real assets.”

Private credit, infrastructure, and even collectibles are seeing increased allocation not as speculation, but as portfolio ballast.

One category drawing attention recently: fine art as a private market asset.

Not for everyone.

But increasingly considered by investors who already understand patience, scarcity, and long-term appreciation.

Someone just spent $236,000,000 on a painting. Here’s why it matters for your wallet.

The WSJ just reported the highest price ever paid for modern art at auction.

While equities, gold, bitcoin hover near highs, the art market is showing signs of early recovery after one of the longest downturns since the 1990s.

Here’s where it gets interesting→

Each investing environment is unique, but after the dot com crash, contemporary and post-war art grew ~24% a year for a decade, and after 2008, it grew ~11% annually for 12 years.*

Overall, the segment has outpaced the S&P by 15 percent with near-zero correlation from 1995 to 2025.

Now, Masterworks lets you invest in shares of artworks featuring legends like Banksy, Basquiat, and Picasso. Since 2019, investors have deployed $1.25 billion across 500+ artworks.

Masterworks has sold 25 works with net annualized returns like 14.6%, 17.6%, and 17.8%.

Shares can sell quickly, but my subscribers skip the waitlist:

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_{*Per Masterworks data. Investing involves risk. Past performance not indicative of future returns. Important Reg A disclosures: masterworks.com/cd}

The Bigger Picture

What we’re witnessing isn’t a trend headline it’s a structural shift.

CRE investors aren’t abandoning fundamentals.

They’re applying them more broadly.

Expect this theme to accelerate as volatility persists and capital becomes more selective.

We’ll continue tracking where smart money moves and why every week.

— MainStreet News

Tracking capital before it becomes consensus.