As managers seek liquidity without relinquishing prized assets, secondaries are becoming a permanent channel for capital flow. A decade ago, Kilian Toms, a London-based managing director with CBRE Investment Management's real estate partners strategy, sat in the annual meeting of a value-add manager whose fund his team had just bought into in a secondaries market transaction. The tenor of the meeting, Toms remembers, verged on mournful as the company lamented the departure of a long-time investor.

That scene illustrates how far the market has evolved. Once viewed as a distressed exit, secondaries now serve as a strategic portfolio tool for institutions globally. CBRE's strategy has capitalized on this shift, deploying billions across secondary transactions that offer buyers immediate diversification and vintage-year spread. Sellers range from pension funds rebalancing allocations to GPs recycling capital into new funds.

The stigma has evaporated. Toms observes that secondaries represent a permanent channel for capital flow rather than a last resort. With denominator effects easing and transaction volumes rising, the sector is positioned for sustained growth through 2025. As more managers embrace secondaries for liquidity management, the market's depth and sophistication continue to deepen, reshaping real estate capital allocation.