Data-driven analysis revealing how internal rate of return benchmarks vary across fractional real estate platforms and investment strategies
Internal rate of return, or IRR, expresses the annualized return implied by a series of investment cash flows while accounting for when those cash flows occur. That makes the metric useful for comparing real estate opportunities with different holding periods, financing structures, distribution schedules, and exit assumptions.
IRR expectations vary considerably by strategy. Current investor surveys place many private real estate return expectations in the double digits, while institutional underwriting data generally shows lower targets for stabilized properties. Looking at these benchmarks together provides useful context for how projected and reported returns differ across real estate strategies, funds, and digital investment platforms.
Disclaimer: The information provided in this guide is for educational purposes only and does not constitute financial, tax, or legal advice. Always consult with a licensed professional before making any financial or investment decisions.
Key Takeaways
51% of respondents expect 14% to 18% IRR on the private real estate investments they are making in 2026
Core multifamily targets average 7.70% unlevered IRR, compared with 9.36% for value-add multifamily
The broader digital real estate market continues expanding, with real estate crowdfunding estimated at $11.95 billion in 2026
Institutional real estate remained positive in Q2 2026, with the NCREIF Property Index posting a 1.29% total return
mogul lists a 15%–20% target IRR range as of September 28, 2026 and applies a 12% minimum projected IRR hurdle during property underwriting
IRR Benchmarks and Investor Expectations
1. 51% of surveyed investors expect 14% to 18% IRR in 2026
A May 2026 investor survey found that 51% of respondents were making private real estate investments where they expected IRRs between 14% and 18%. This was the largest return band reported by survey participants.
Another 36% fell into the 10% to 14% range, while a smaller group targeted returns above 18%. Together, the responses show that expected IRRs can cluster within relatively defined ranges while still varying meaningfully with investment strategy and underlying assumptions.
2. 36% of surveyed investors expect 10% to 14% IRR
Another 36% of respondents were making private real estate investments where they expected an IRR between 10% and 14%. This was the second-largest return range in the same 2026 survey.
Combined with the 51% targeting 14% to 18%, the results put most respondents within a double-digit range below 18%. That distribution provides a useful snapshot of current private real estate expectations rather than suggesting that a single IRR applies across every strategy.
3. 8% of surveyed investors expect 18% to 22% IRR
At the upper end of the survey, 8% of respondents were investing where they expected IRRs between 18% and 22%.
Return targets at this level can appear in strategies with different leverage, renovation, development, or operating assumptions than more stabilized assets. The percentage therefore adds context to the wider spread of projected returns investors are using in 2026.
4. Core multifamily unlevered IRR targets average 7.70%
Core multifamily underwriting targets held at 7.70% unlevered IRR in Q4 2025, according to research published in March 2026. The level was unchanged for the third consecutive quarter.
Core multifamily typically involves established properties with comparatively stable operations, so its underwriting profile differs from strategies built around significant renovation or repositioning. That helps place the 7.70% figure within the broader range of real estate IRR benchmarks.
5. Value-add multifamily unlevered IRR targets average 9.36%
Value-add multifamily carried a 9.36% unlevered IRR target in the same underwriting survey. The target had compressed for eight consecutive quarters by Q4 2025.
Value-add strategies often incorporate renovation, leasing, or operational improvements into their underwriting. Those additional components help explain why the target sat above the corresponding core multifamily benchmark.
6. Commercial real estate target IRRs often sit around 15% to 20%
Commercial real estate underwriting commonly uses 15% to 20% IRR as a broad target range. The benchmark spans a wide variety of properties and investment approaches.
Property type, debt structure, purchase price, business plan, and hold period can all shape the final target. A projected return on a stabilized acquisition therefore may reflect very different assumptions from the same percentage applied to a redevelopment project.
7. Core and stabilized properties typically target 8% to 12% IRR
Typical core property IRRs fall between 8% and 12%, with higher outcomes possible depending on the property and market.
These assets generally involve established occupancy and fewer major operational changes than value-add or development strategies. Their target range provides a useful reference point within the broader spectrum of commercial real estate underwriting.
8. Opportunistic and development strategies typically target 18% to 22% IRR
Opportunistic and development investments commonly target 18% to 22% IRRs, with potential targets reaching 25% in some circumstances.
These strategies can include ground-up development, substantial repositioning, or other business plans requiring more execution before stabilized operations are reached. Their higher target ranges help illustrate how IRR expectations can change across real estate strategies.
Digital Real Estate Platform Growth
9. The real estate crowdfunding market is estimated at $11.95 billion in 2026
The broader real estate crowdfunding sector is estimated at an $11.95 billion market in 2026, up from $9.86 billion in 2025.
The category includes several types of digital real estate investment structures and is broader than fractional property ownership alone. Its expansion nevertheless provides useful context for the increasing role online platforms play in connecting investors with real estate opportunities.
10. The market is projected to reach $28.84 billion by 2031
The same market is projected to reach $28.84 billion by 2031, corresponding to a forecast compound annual growth rate of 19.27% between 2026 and 2031.
This is a market-size forecast rather than an investment-return projection. It reflects expected growth in digital real estate activity while remaining separate from the property-level IRRs investors may see on individual offerings.
11. More than 6.3 million users were registered across leading fractional platforms by 2026
Participation in fractional real estate has also expanded, with 6.3 million registered users reported across leading platforms globally by 2026.
Registered-user figures measure overall platform adoption rather than the number of funded accounts. Even with that distinction, the total gives a useful indication of how broadly fractional property investing has entered the digital real estate market.
Investor Allocation and Strategy Preferences
12. Global real estate allocations average 12.4% of investor portfolios
Current institutional allocations to real estate average 12.4% of portfolios globally, compared with an average target allocation of 12.5%.
The narrow gap indicates that surveyed investors entered 2026 positioned close to their stated real estate targets. While allocation percentage is different from IRR, it helps show the role real estate continues to occupy within larger investment portfolios.
13. 38% of global investors expect to increase real estate allocations
Looking ahead, 38% of investors expect their real estate allocations to increase over the next two years, while 28% expect allocations to decrease.
That creates a net positive allocation outlook among the investors surveyed. Additional capital can influence demand for properties and funds, although individual investment returns continue to depend on underwriting and asset-level performance.
14. 74% of commercial real estate investors plan to buy more assets in 2026
Acquisition intentions strengthened heading into 2026, with 74% planning more purchases than in the previous year.
The result points to increased transaction appetite among surveyed investors. Available properties, financing conditions, pricing, and required returns will continue to influence how those acquisition plans translate into completed deals.
15. 55% of investors plan to increase their real estate capital allocation
Capital plans are also expanding, with 55% increasing allocations to real estate in 2026, up from 48% in the previous year's survey.
This measures planned capital deployment rather than property performance, but it provides additional context for the amount of investor capital potentially competing for real estate opportunities during the year.
16. 74% of U.S. investors are targeting multifamily assets
Multifamily remains the most frequently targeted traditional property sector, with 74% targeting multifamily among U.S. respondents.
That preference is particularly relevant to IRR comparisons because multifamily spans several investment profiles, from stabilized core assets to value-add strategies. The property type alone therefore does not determine the appropriate return benchmark.
17. 37% of U.S. investors are targeting industrial and logistics assets
Industrial and logistics properties were selected by 37% targeting industrial assets, compared with 27% for retail and 16% for office.
Each sector carries different lease structures, capital requirements, and operating characteristics. Those differences help explain why comparable IRR analysis is generally most useful when properties share similar strategies and underlying economics.
18. About two-thirds of investors favor value-add and core-plus strategies
Strategy preferences also leaned toward value-add and core-plus, with two-thirds favoring them in the 2026 survey.
Both approaches sit between stabilized core investing and more operationally intensive opportunistic strategies. Their popularity provides additional context for why many current return expectations occupy the middle of the broader real estate IRR spectrum.
Institutional Real Estate Scale and Performance
19. Global real estate AUM increased 5.7% to €3.8 trillion
Global real estate assets under management reached €3.8 trillion after AUM increased 5.7% at year-end 2025.
The increase followed €3.6 trillion recorded one year earlier and marked the first rise after three consecutive years of declining AUM. The figure provides a current measure of the scale of the institutionally managed real estate market entering 2026.
20. Upper-quartile managers account for 78% of global real estate AUM
The largest group of managers controlled more than €3 trillion in real estate AUM, equal to approximately 78% of the global total represented in the 2026 survey.
That concentration highlights the scale of established institutional managers and provides useful perspective for a market that also includes smaller funds, direct ownership strategies, and newer digital property platforms.
21. The NCREIF Property Index returned 1.29% in Q2 2026
Institutional property performance remained positive during the second quarter, with the NCREIF Property Index posting a 1.29% total return.
The quarterly result consisted of a 1.17% income return and 0.12% appreciation. Because the index measures unleveraged institutional property performance, it offers a different perspective from the multi-year projected IRRs commonly used in property underwriting.
22. The NFI-ODCE returned 1.49% in Q2 2026
The Open-End Diversified Core Equity fund index recorded a 1.49% total return in Q2 2026, including a 1.02% income return and 0.47% appreciation.
The index represents diversified core real estate funds, making its quarterly performance useful context alongside longer-term return targets while still reflecting a different measurement period from projected deal-level IRR.
23. Global IRR for the 2022 real estate fund vintage reached 9.07%
The global 2022 real estate fund vintage reached a 9.07% global IRR in Q4 2025, improving by 178 basis points from the previous measurement.
Vintage-year IRRs develop over time as funds receive additional income, update asset values, and complete property sales. This makes the figure a useful point-in-time view of how one global fund vintage was progressing as 2026 began.
mogul IRR and Underwriting
24. mogul currently lists a 12% to 20% target IRR range
As of September 28, 2026, mogul's current platform figures list a 12% to 20% target IRR range. The range provides a clear underwriting benchmark across selected property opportunities on the platform.
IRR brings together expected property cash flows and the timing of those cash flows over the investment period. Using a defined target range allows individual property assumptions to be viewed within mogul's broader underwriting framework while retaining property-level analysis for each opportunity.
25. mogul applies a 12% minimum projected IRR hurdle during underwriting
mogul's property selection process applies a 12% minimum projected IRR hurdle, inclusive of applicable one-time fees. Less than 1% of reviewed properties pass the platform's diligence process.
The hurdle forms part of a broader property-selection framework that includes market research, property analysis, acquisition review, and investment-committee scrutiny. Together, these steps establish the standards properties must meet before being selected for the platform.
How to Interpret IRR Benchmarks
IRR percentages are most useful when the calculations being compared are based on similar assumptions. A property-level target IRR, an investor survey response, a quarterly index return, and a fund-vintage IRR can all express performance numerically while measuring different periods and cash-flow structures.
Financing is one reason results can differ. Leverage affects the equity required to acquire a property as well as the size and timing of subsequent cash flows. Holding period has a similar influence because receiving proceeds earlier or later changes the annualized rate produced by the IRR calculation.
IRR is therefore commonly viewed alongside cash-on-cash yield, net operating income, equity multiple, financing structure, distributions, and exit assumptions. Understanding IRR and ROI also helps distinguish a metric that incorporates cash-flow timing from a simpler calculation of total gain relative to invested capital.
Property-level assumptions can be explored with mogul's investment property calculator, which allows financing, holding period, income, expenses, and other variables to be adjusted across different scenarios.
Disclaimer: The information provided in this guide is for educational purposes only and does not constitute financial, tax, or legal advice. Always consult with a licensed professional before making any financial or investment decisions.
Frequently Asked Questions
What does IRR mean in real estate investing?
IRR is the discount rate that makes the net present value of an investment's cash flows equal to zero. In practical terms, it translates the timing and size of cash inflows and outflows into an annualized return measure. mogul's guide to internal rate of return provides additional context on how the metric works in real estate analysis.
What IRR are real estate investors expecting in 2026?
Expectations vary by strategy. In a 2026 investor survey, 51% of respondents were making private real estate investments where they expected 14% to 18% IRR, while 36% expected 10% to 14% and 8% expected 18% to 22%. These ranges provide a current snapshot of how surveyed investors are approaching private real estate return expectations.
How do core and value-add IRR targets compare?
Recent multifamily underwriting data shows a 7.70% unlevered IRR target for core properties compared with 9.36% for value-add multifamily. The difference reflects the distinct operating assumptions associated with stabilized assets and properties involving renovation, leasing, or repositioning.
How is IRR different from ROI or cap rate?
ROI measures overall gain relative to invested capital without incorporating when individual cash flows occur. Cap rate generally compares a property's net operating income with its purchase price or value at a particular point in time. IRR incorporates the timing of multiple cash flows across the investment period, giving each metric a different analytical role.
Are target IRRs the same as realized investment returns?
Target IRRs are based on underwriting assumptions involving rental income, operating expenses, financing, property values, holding periods, and eventual sale proceeds. Realized IRR is calculated from the actual cash flows produced over the investment period, making the two useful at different stages of real estate analysis.