Real estate M&A transactions jumped 40% over the past two years, with sector-specific managers driving a new wave of consolidation, according to Hodes Weill's 2025 M&A Market Review. Managing partners Doug Weill, David Hodes, and Alfredo Lobo report that credit, industrial, and residential platforms are increasingly attractive for minority-stake and bolt-on acquisitions.

Buyers are pursuing these deals to enhance margins through both asset growth and expanded operating capabilities, enabling managers to charge additional fees beyond asset management. Weill estimates that about one in five real estate M&A deals now involve sector-focused managers, up from previous years. Notable transactions include Federated Hermes' $331 million acquisition of an 80% stake in multifamily firm FCP Fund Manager and Tokio Marine Holdings' majority position in real estate credit specialist ACORE Capital.

The surge in minority stake sales has narrowed valuation discounts compared to strategic or control stakes, with well-positioned managers commanding EBITDA multiples as high as 14-16x. Weill notes that buyers are pricing for double-digit AUM growth, particularly from smaller firms with higher growth trajectories. The aggregate target real estate AUM reached $605 billion, the largest figure in five years and 83% higher than 2021 levels.