Family offices could take a hit in Trump’s ban on investors buying homes

A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide for the high-net-worth investor and consumer. subscription To receive future issues, directly to your inbox.

Private investment firms of ultra-wealthy families could unwittingly fall into the crosshairs of President Donald Trump’s proposed ban on “large institutional investors” buying more single-family homes. While Trump’s announcement targeted Wall Street landlords, especially private equity giants like Blackstone, Heinz Bohn partner Vicki Audet told Inside Wealth that family offices aren’t necessarily out of the woods.

Three-quarters of North American family offices invest in real estate, with an average allocation of 18%, according to a survey released by Campden Wealth and RBC Wealth Management last year. Residential properties make up just under a third of the average family office’s real estate holdings, according to the same report.

The consequences of Trump’s proposal depend on how a large institutional investor is defined, which has not yet been revealed. According to Audette, Congress and government agencies in recent years have focused on the number of homes owned rather than an investor’s total assets or investment strategy.

The Government Accountability Office’s 2024 report on institutional investors focused on those who own more than 1,000 properties of four units or fewer. That threshold is even lower in the Stop Predatory Investment Act introduced in March, which calls “ineligible single-family property owners,” defined as taxpayers who directly or indirectly own 50 or more single-family rental residential properties.

“There are a lot of wealthy families who may unwittingly fall into this category because they are real estate developers and made their money in real estate,” said Audet, a partner at Heinz Bohn who advises family offices, funds and institutional investors.

Family offices generally prefer multifamily housing and commercial developments, she said. However, there are some family offices, especially in the South, that have a large portfolio of single-family homes in suburban or rural areas.

Michael Cole, managing partner at R360, an investing community for millionaires, said it’s too early to know whether the ban will affect family offices. What confuses matters, he said, is the fact that family offices are organized in a variety of ways.

“There is no legal entity called a family office. It is not a corporation, it is not an LLC, it is not an FLP,” he said, referring to family limited partnerships. “These are organizations that are run with the concept of a single-family office, but a single-family office is not a legal structure.”

Family offices likely won’t be immediately affected, because Wall Street landlords are the primary target, said Arielle Frost, a partner at Withers Real Estate. What is not clear, she added, is whether politicians and lawmakers will continue to target other types of investors.

“The first strike is probably the most important, because you need to have the support for it and the momentum behind it,” she said. “Then the question becomes is it going to go away? OK, we’ve made our base happy, now we move on to other things, or is this really something that management cares about and is going to continue to focus on?”