If you’re a real estate fund manager looking to raise institutional capital, be aware that global investors are ready to allocate funds again. However, they’re only interested in platforms that look, operate, and report like institutions themselves. That was one of the big takeaways from MIPIM 2026, a global property trade show.
While there’s still solid interest in U.S. real estate, getting access to that capital means having the right structure, governance, and execution. For general partners (GPs), the focus has shifted from telling a good story to proving you’re institutionally ready. This article will feature insights from MIPIM on what institutional investors are looking for in U.S. real estate funds.
Institutional Investors Are Back, but They’re Selective
Institutional investors and large family offices are still committed to U.S. real estate, especially through commingled funds, programmatic joint ventures, and real estate investment trust (REIT) structures. However, capital is no longer flowing broadly across all sectors or managers. Allocators are prioritizing proven investment strategies, experienced operating platforms, and managers with a record of disciplined capital use.
Sectors such as data centers, multifamily housing, senior living, necessity‑based retail, and certain hospitality strategies are attracting attention. However, investors want these delivered through large-scale platforms with strong institutional controls. In contrast, raising capital for office strategies without a clear plan has become increasingly difficult. For fund sponsors, this means that having a clear strategy and a credible platform is just as important as hitting internal rate of return (IRR) targets.
What Institutional Limited Partners (LPs) Look for Beyond the Assets
Discussions with investors revealed that institutional LPs are underwriting the GPs as rigorously as the portfolio. Investment committees are focused on whether managers can operate as long‑term fiduciaries and are not just chasing quick wins.
Key diligence questions to consider include:
- Governance and controls: Are there strong oversight, valuation, and risk management practices in place?
- Transparency and reporting: Are high-quality financial statements, net asset value (NAV) support, and data consistency available to investors?
- Tax efficiency and structuring: Is a robust structure in place, especially for cross‑border capital and complex investor bases?
- Alignment of interests: Do fee structures, co‑investment, and how much GP capital is at risk reflect aligned interests?
- Scalability: Can your platform handle not just the first fund, but the ability to deploy capital across vintages?
Funds that cannot clearly articulate how they meet institutional standards are increasingly cut from the process early on.
Data Centers & Specialized Sectors Require Operational Proof
Data centers are one of the most popular areas for institutional investors now. They are seen as core portfolio components due to the rise of artificial intelligence (AI) adoption, cloud infrastructure expansion, and long-term contracts that provide steady cash flows. Capital favors platform-scale strategies with clear power access, entitlement certainty, tenant credit quality, and operational depth.
Institutional investors showed strong interest in specialized sectors, particularly data centers and senior housing, but emphasized that capital follows operating capability, not thematic exposure.
For data center funds, LPs are looking at:
- How you secure power and grid access
- Your ability to navigate development and entitlement processes
- The credit quality of your tenants and the structure of their contracts
- Whether your platform can scale and handle operational challenges
Similarly, in senior housing and hospitality, investors want to see strong operators, solid asset‑level controls, and performance monitoring, favoring fund structures that institutionalize operating risk rather than concentrate it.
Sustainability Strategy Is No Longer Optional
Sustainability is now a requirement. Institutional LPs now see sustainability as essential and tied to everything from liquidity and insurance to financing terms and cash flow stability. While terminology may vary, investor and lender requirements continue to drive expectations regarding climate risk management, building performance, and efficient operations. For real estate funds and REITs, sustainability is a key factor in whether investors will back a fund.
Technology, Data, & AI as Institutional Enablers
Technology and data capabilities have become key indicators of a GP’s maturity. Institutional investors are no longer impressed by high‑level proptech narratives; they want to see how data is actively used to make better investment decisions and manage risks.
AI is playing a growing role in underwriting discipline, portfolio construction, and ongoing asset management. AI‑enabled analytics are being used to improve valuations, analyze scenarios, and monitor performance, which helps make investment decisions more defensible and reporting more reliable.
How Forvis Mazars Can Help
At Forvis Mazars, we work closely with real estate funds, asset managers, registered investment advisers, REIT sponsors, owners, and developers to help align financial and investor reporting, tax, valuation, and advisory frameworks with institutional investor expectations. As fundraising dynamics evolve, the differentiator will be the ability to present not just a strategy, but an institutional platform built to earn and retain capital across cycles. If you have any questions or need assistance, please reach out to a professional at Forvis Mazars.