Real estate fundraising encountered a significant bump in the road in the third quarter of 2023. Only US$13.1 billion was raised by the 16 funds holding a final close in July–September, according to the latest results from Institutional Real Estate, Inc’s proprietary database, IREI.Q.

Investors took a wait-and-see posture in the third quarter of 2023, given the many uncertainties facing the market. Commercial real estate transaction volume is down amid a wide bid-ask spread between buyers and sellers. Rising interest rates — and the associated uncertainty about how long rates will remain elevated — are set to force some repricing of assets, and those with dry powder may be able to take advantage of distressed opportunities that arise.

The paltry fundraising total in the