If it's impossible to beat fixed income in an environment of high interest rates and instability, real estate investment trust (REIT) managers have decided to join this asset class.
Amidst a lack of liquidity and a closed market for issuances, managers have been circumventing the liquidity shortage by launching funds with subclasses, adopting a structure established in FIDCs ( Investment Funds in Credit Rights) and debentures to offer what investors, especially retail investors, want most at this moment: predictability and stability. Structures that were practically nonexistent in 2024, funds with multiple classes of shares grew strongly last year.
A survey conducted by Daycoval Asset at the request of NeoFeed shows that, of the 45 most significant transactions registered with the Brazilian Securities and Exchange Commission (CVM) in terms of volume in 2025, 37% of the total amount was raised by multi-class vehicles. Considering feeder funds of multi-class funds, this total rises to 47%. The year ended with a total of 428 transactions.
Managers interviewed by NeoFeed expect the number of multi-class REIT offerings to increase even further in 2026. Even with the market improvement, with the real estate fund index (IFIX) accumulating a 17.93% increase in the 12 months ending April 17th, the assessment is that investors are still very reluctant to leave fixed income investments.
“We saw a recalibration of risk perception, spreads ended up compressing a bit, prices went up, but the scenario is still cautious,” says Martim Fass, FII manager at Daycoval Asset. “This is reflected in new issuances, with very few traditional, pure equity brick-and-mortar operations, and many senior tranches.”
Just like with FIDCs, CRIs, and CRAs, REITs with subclasses offer senior and subordinated shares, with the former having top priority in receiving payments but lower yield, while the latter bears a certain level of asset risk, absorbing defaults, in exchange for higher returns.
The creation of REITs with subclasses was permitted by Resolution 175 of the Securities and Exchange Commission (CVM) , published in December 2022, which allowed the same fund to issue different classes of shares. These provisions only came into effect in April 2024, which explains why the offerings gained traction in 2025.
Real Estate Investment Funds (FIIs) with senior and subordinated shares have a fixed term, unlike a traditional fund, which has no end date. Generally, these funds have a duration of five to seven years. At the end of the period, the assets are sold so that the proceeds from the sale are used to remunerate investors.
In the case of senior tranches, investors receive a pre-determined return, based on rents and the liquidity event at the fund's end, mimicking fixed income, while subordinated tranches retain the surplus.
According to Rodrigo Abbud , partner and head of real estate at Patria Investimentos in Brazil, this type of REIT, created in partnership with banks and distributors, is capable of providing a sense of security for investors during a time of high market volatility.
“Investors are looking for predictability and stability in income distribution right now. They are willing to forgo upside potential to avoid downside potential at a time like this,” says Abbud. “They say, ‘Pay me inflation plus 8% or 9.5%, the range these operations are coming in at, and that’s great.’ It’s almost like a fixed income investment.”
The fact that these funds are not listed means that the share price doesn't fluctuate much, an important aspect psychologically. "This structure became popular because you mark the client's portfolio in a linear fashion. This became popular for those who don't like the 'rock and roll' of a single share price that keeps going back and forth," says Pedro Ferronato, partner and co-head of credit at Paladin in Brazil.
The combination of the fixed-income aspect of senior tranches and the income tax exemption on REIT dividends is the sector's strategy to attract investors back to the market.
Street operations
All these characteristics have helped to unlock the market, especially for real estate investment trusts (REITs). JiveMauá was one of the first firms to offer this type of REIT. At the end of 2024, it launched MCLO11, a logistics fund, which raised R$ 1.2 billion. The senior tranche pays IPCA plus 9%.
According to Brunno Bagnariolli , partner and investment director of JiveMauá's real estate strategy, the decision to structure this vehicle stemmed precisely from the difficulty of raising capital through traditional methods. He stated that the firm was only able to conduct offerings of traditional funds for credit during that period, not for real estate development.
"Considering the current level of interest rates, raising capital for real estate is happening either through the senior and subordinated model or through the share swap model," he says.
Bagnariolli says the experience was quite positive, with JiveMauá raising what it expected in 13 days. The investors' receptiveness led the asset manager to conduct three more fundraising rounds with the same structure, raising approximately R$ 2.1 billion, all through real estate investment trusts (REITs).
The real estate vertical currently has a total of R$ 10.5 billion in assets under management and is considering potentially launching new funds of this type. "It's a very good way to put resources to work," says Bagnariolli.
Multi-class funds are also helping to enable other strategies in the real estate market. Patria, which has R$ 38 billion in assets under management in the real estate sector, launched a fund called Patria Oportunidades to provide financing to companies, which has already raised R$ 1 billion for its senior tranche. Amid a restructuring process, data on the fund's return have not been disclosed.
Tivio Capital has structured a multi-class fund to invest in other REITs (Real Estate Investment Trusts). The asset manager – recently consolidated by Bradesco and holding R$ 4.03 billion in real estate mandates, of which R$ 3.815 billion are in REITs – raised R$ 400 million from the bank's clients for a REIT that buys shares of real estate and credit funds. The senior share pays IPCA (Brazilian inflation index) plus 9%.
According to Adriano Mantesso, head of real estate at Tivio, the security that the FII (Real Estate Investment Fund) provides to investors helped to make viable an "opportunistic play " that the asset manager was considering.
“We saw a window of opportunity, with shares being traded at an attractive discount. And with interest rates falling again, these shares tend to appreciate, providing sufficient returns to make this subordinated share attractive enough for those seeking capital gains,” says Mantesso.
Caution
Just as any new product generates excitement, managers emphasize that it is necessary to look carefully at what is being offered.
A professional interviewed by NeoFeed , who asked not to be identified, warned that the existence of a subordinated share does not mean that the fund is risk-free.
"The investor ends up not paying attention to the credit level, the term, the duration. He's buying into the idea that 20% subordination can withstand any affront," says this source.
He points out that some funds have few assets. In the case of a real estate fund whose focus is a specific region, if there is a structural problem, there is no subordination to mitigate the losses. Therefore, he rules out any comparison with FIDCs (Investment Funds in Credit Rights).
“In FIDCs (Investment Funds in Credit Rights), there are millions of credits, there is statistical work to monitor default rates, and many of these credits are short-term. The FIDC is a structure that relies on diversification and volatility,” says this source. “In the case of FIIs (Real Estate Investment Funds), the concern of this multi-class structure is to eliminate volatility. In this initial phase, these funds are being packaged more for sale.”
According to Fass of Daycoval Asset, it's necessary to pay attention to the level of subordination and the quality of the assets, which will need to be sold at a profit. It's also important to understand that senior tranches are not pure fixed income. "If everything goes right, it looks like fixed income. If it goes wrong, it can lead to losses that many people aren't aware of," he says.
