J.P. Morgan Asset Management forecasts 8.1% annualized U.S. core real estate returns

J.P. Morgan Asset Management forecasts 8.1% annualized returns for U.S. core real estate over the next 10 to 15 years, a slight decrease from its previous projection. IREI attributes the decrease to higher interest rates.

The same 2027 Long-Term Capital Market Assumptions put European core real estate at 7.1%, up from 6.9%, leaving a one-percentage-point gap between the two regions on the firm's numbers.

Global core infrastructure is projected at 7.1%, up from 6.5%, an increase IREI says reflects expectations that manufacturing reshoring and changes in global supply chains will support industrial production and transportation assets. Global timberland slips to 6.2% from 6.3%.

The report also puts a diversified portfolio with a 30% allocation to alternatives at 7.5% annualized, against 7% for a traditional 60/40 mix. It is the firm's 31st annual outlook and covers more than 200 assets in more than 20 currencies, with projections built on stronger productivity growth from AI adoption alongside persistent inflation.

The forecast arrives after the firm's real estate Americas platform closed an oversubscribed $1.1 billion net lease fund in September, with a majority of capital from investors new to the platform, per our reporting.