BLOG: WHY FAMILY OFFICES ARE TURNING TO IMPACT INVESTING IN COMMERCIAL REAL ESTATE
NEEL SHETTI, Russell Glen, Chief Investment Officer: Family offices—private wealth management firms serving high-net-worth families—have historically favored conservative, long-term investment strategies. But as generational priorities shift and the concept of legacy evolves, more family offices are seeking opportunities that not only preserve wealth but also create measurable social and environmental impact. One sector attracting growing attention is impact-driven commercial real estate.
The Convergence of Purpose and Profit
Impact commercial real estate focuses on developing or revitalizing properties that generate financial returns while contributing to positive outcomes—such as affordable housing, green infrastructure, community revitalization, or inclusive economic development. For family offices, this creates a compelling proposition: aligning investments with family values, particularly those of younger generations increasingly concerned about climate change, equity, and sustainability.
Why It’s a Natural Fit for Family Offices
Unlike institutional investors constrained by strict mandates or short-term pressures, family offices enjoy greater flexibility. They can take longer time horizons, pursue place-based investing strategies, and customize portfolios to reflect family values. This flexibility makes them ideal backers of impact real estate projects, where returns may take time to materialize but offer strong upside in both value and virtue.
Family offices are also uniquely positioned to:
Influence neighborhoods at scale: By investing in underserved areas, they can catalyze revitalization and attract additional capital.
Support generational goals: Impact investing fosters deeper engagement from younger family members, who often want their inheritance to be a force for good.
Benefit from policy tailwinds: Governments are increasingly supporting sustainable and inclusive development through tax incentives, zoning reforms, and ESG-related programs.
Key Opportunities in Impact CRE
Affordable and Workforce Housing: Addressing housing shortages while generating stable, long-term rental income.
Green Buildings and Retrofitting: Reducing carbon footprints through energy-efficient upgrades and LEED-certified developments.
Mixed-Use Developments: Revitalizing urban cores by combining residential, retail, and community spaces in walkable neighborhoods.
Healthcare and Community Services: Investing in facilities that serve vital public needs while offering recession-resilient returns.
Due Diligence with a Double Bottom Line
Investing in impact real estate requires robust diligence, not just on financial metrics, but also on social outcomes. Family offices are increasingly adopting Impact Management Project (IMP) frameworks or partnering with third-party advisors to ensure accountability and transparency. Metrics like energy savings, jobs created, or number of affordable units can be tracked alongside IRR and NOI.
The Future: Legacy Through Landscape
Impact investing in commercial real estate isn’t a trend—it’s a strategic evolution. For family offices, it's a way to build physical legacies that reflect their values, engage future generations, and contribute meaningfully to the world around them.
The demand for purpose-driven portfolios will only grow. Impact commercial real estate offers a rare chance to shape skylines and systems—for profit and for good.