Real estate secondaries returned to the news on 11 November 2026. Bloomberg reported that Blackstone's Strategic Partners unit aims to raise at least US$3 billion to buy stakes in other managers' core real estate funds. According to Bisnow's account of the Bloomberg report, the fund would buy those interests at discounts to net asset value. The story concerns a large U.S. firm, but it holds a lesson for Indian investors weighing a private U.S. real estate investment.
A private stake can sometimes be sold before the property is sold. The buyer usually sets the price, however, and that price is normally below the last reported value. Early exit is therefore possible but costly, and the documents an investor signs at the start decide much of that cost. The complete guide to investing in U.S. real estate from India explains the wider process, while this article looks at the exit side of it.
What Real Estate Secondaries Are
A secondary is a sale of an existing stake in a private fund or deal, from one investor to another. The property itself does not change hands. Only the holder of the interest changes, which is why the trade is called secondary, as opposed to the primary commitment made when a fund first raises money.
The Real Deal described the market on 12 November as the buying and selling of existing fund stakes, "often from investors seeking an early exit". Law firm Gibson Dunn, in a client alert of 8 September 2026, applied the term more widely. Its range runs from a simple sale of a fund interest to the rebuilding of a whole fund or joint venture. Two forms matter most to an individual, and both connect to the wider question of liquidity in private real estate investment.
How Prices Are Set Against Net Asset Value
Net asset value, or NAV, is the manager's estimate of what a fund's holdings are worth after its debts, usually updated each quarter. It is an appraisal rather than a market price, because private property does not trade every day. A secondary buyer starts from that figure and decides how much less to pay.
Herbert Smith Freehills Kramer, a law firm, explains in its guide to these sales that the price normally starts from the latest quarterly valuation. It is then adjusted for cash paid in or out since. The firm adds that sales are normally made at a discount to NAV, reflecting valuation uncertainty and the liquidity the buyer provides. In practice, the seller pays for speed, and the buyer charges for taking on a stake it cannot easily sell.
Gibson Dunn added a further caution. Reported NAVs "have lagged the fall in underlying values", the firm wrote, so a stated discount to reported NAV says little on its own. It becomes meaningful only once the buyer and seller understand the property, its debt and its tenants.
LP-Led Sales and the Continuation Vehicle
In an LP-led sale, a limited partner, meaning an investor in the fund, finds a buyer for its own stake. The manager is not the seller, but it is usually involved. Herbert Smith Freehills Kramer notes that a fund's partnership agreement will very likely require the manager's consent to a transfer. Transfers also often happen only on set dates, such as the end of a quarter. Both sides go through fresh know-your-customer checks, which the firm says can take a lot of time.
In a GP-led deal, the general partner, meaning the manager, starts the process. A common form is the continuation vehicle, a new fund that buys one or more assets from the old one and holds them for longer. Existing investors then choose to take cash or roll their interest into the new vehicle. Gibson Dunn notes that the manager often sits on both sides of such a deal. For that reason, investor consent and the price at which investors sell or roll draw close regulatory attention.
Why the Secondary Market Has Grown
Volume has risen as property sales slowed. According to Ares Management figures reported by IREI on 18 February 2026, real estate secondaries reached a record US$20.3 billion in 2025 across 189 transactions. GP-led deals made up US$14.5 billion of that, up 60% on the year before, and LP-led trades made up US$5.8 billion. Managers used continuation vehicles to raise cash while keeping control of assets, IREI reported, and investors sold stakes as fund distributions stayed historically low.
Bisnow linked the growth to the Federal Reserve's rate increases from 2022, which slowed property sales and therefore the cash that funds would normally pay out. CBRE Investment Management, in a May 2026 release, counted US$25.1 billion of global real estate secondaries in 2025 on its own measure. That figure covers a different scope from the Ares number, so the two should not be compared.
Bisnow also reported that Blackstone turned to secondary buyers in September so that some investors in its Blackstone Property Partners funds could sell. Even the largest managers use this market when investors want cash faster than property sales provide it.
Where an Indian Investor's Stake Fits
Most of this market serves large institutions selling fund stakes worth millions of dollars. An Indian individual's position is smaller and sits inside a different structure. Indian investors typically invest through a U.S. corporation, often called a blocker, which holds the property interest, and they typically receive Form 1042-S for U.S. tax reporting. Selling early would mean transferring an interest in that structure, under the rules in its offering documents.
Those rules start with U.S. securities law. The SEC's investor education site says in its bulletin on private placements under Regulation D that most such securities are restricted and that investors should be prepared to hold them indefinitely. Under Rule 144, a resale generally needs a holding period of at least one year when the company does not file regular reports with the SEC. The restricted status may also pass to the buyer. Offerings made outside the U.S. under Regulation S carry their own resale conditions, which the offering documents set out.
Beyond the law, the documents usually decide whether a transfer is possible at all. Before committing money, an investor can ask the sponsor three plain questions.
- Can the interest be transferred before the property is sold, and on what conditions?
- Has the sponsor ever arranged buyers for investors who wanted to leave early?
- How is the value of the interest reported, and how often is it updated?
Money for these stakes leaves India under the Liberalised Remittance Scheme, which the RBI caps at US$250,000 per resident individual per financial year. A sale also has tax consequences in the U.S. and in India, which the investor's CA should review before agreeing a price. The guide to how the blocker structure is taxed explains the reporting on both sides.
Risks and Limits of Relying on a Secondary Sale
The first limit is that no buyer may appear. Secondary buyers prefer large stakes in funds holding the property types they want. Bisnow reported that Blackstone's fund will focus on data centres, rental housing and industrial property. A small interest in a single deal may attract no offer at all.
The second limit is price. Sales normally happen below NAV, and in a weak market the gap can widen just when a seller most needs cash. The third is time, because manager consent, quarterly transfer dates and fresh KYC checks all add weeks or months. Non-traded REITs show a similar pattern through their redemption limits, as this explainer on non-traded REIT redemptions sets out.
Currency adds another layer. A stake sold for dollars may be worth more or fewer rupees than when the money left India, as the guide on dollar assets for Indian investors discusses. A secondary market also leaves the core risks of private real estate in place. Investors can lose capital, property values can fall, tenants can leave, distributions may not be paid and loans may be hard to refinance.
What the Blackstone Raise Says About Exit Terms
The Blackstone raise shows that a market for private real estate stakes is real and growing, and it shows who sets the terms. Buyers with capital choose the funds and property types they want, and they pay below the last reported value in exchange for taking on the wait.
For an Indian investor, the sensible reading is to plan on holding a private U.S. investment until its property is sold, and to treat any earlier exit as an option that may exist, at a price. The terms that decide that price sit in the offering documents. They belong in the review before money is sent, alongside the property, the sponsor and the structure. The India investment guide sets out how that review fits into the full process.
Eligible investors can review how investing in U.S. real estate from India works on Raveum, including the property, sponsor, ownership structure, fees, risks and offering documents for each opportunity.
Frequently Asked Questions
What are real estate secondaries?
Real estate secondaries are sales of existing stakes in private real estate funds or deals, from one investor to another or through a deal the manager organises. The property does not change hands. Only the holder of the interest changes. Ares Management counted a record US$20.3 billion of these trades in 2025.
Why do secondary buyers pay less than NAV?
Buyers usually pay less than net asset value because NAV is an appraisal, not a traded price, and it can lag real values. The buyer also takes on a stake it cannot easily sell again. Law firm Herbert Smith Freehills Kramer says sales are normally made at a discount for these reasons.
What is a continuation vehicle in real estate?
A continuation vehicle is a new fund, set up by the manager, that buys one or more properties from an existing fund and holds them for longer. Existing investors choose to take cash or roll their interest into the new vehicle. Because the manager sits on both sides, investors should study the price closely.
Can I sell my private U.S. real estate investment before the property is sold?
Sometimes, but you should not count on it. Private placement securities are usually restricted, and the SEC's investor education site tells investors to be prepared to hold them indefinitely. Any early sale depends on the offering documents, the sponsor's consent and finding a buyer, and it usually happens below the last reported value.
Do I need the sponsor's permission to sell my stake?
In most private funds and deals, yes. Herbert Smith Freehills Kramer notes that a fund's partnership agreement will very likely require the manager's consent to a transfer, and transfers often happen only on set dates. Check the transfer section of the offering documents before you invest, because it decides what is possible later.
Who buys real estate secondaries?
The main buyers are specialist secondary funds run by large managers. In November 2026, Bloomberg reported that Blackstone's Strategic Partners unit aims to raise at least US$3 billion for this purpose, and The Real Deal noted that Neuberger Berman raised over US$1 billion for a similar fund. They prefer larger stakes in sectors they favour.
This article is for general education only and is not investment, tax or legal advice. Rules change and depend on individual circumstances. Investing in private real estate involves risk, including loss of capital, illiquidity, falling property values, distributions not being paid and currency movements. Participation is limited to non-U.S. persons under SEC Regulation S and verified U.S. accredited investors under Regulation D Rule 506(c), and offerings on Raveum are not open to the general public.
