The alternative investment space is filled with numerous opportunities, and Arrived has the potential to capture a good share of the fast-growing market. Alternative investments refer to investment opportunities other than the traditional options such as stocks, bonds, gold, or cash. Alternative investments include private equity, real estate, hedge funds, commodities, cryptocurrencies, derivative contracts, and managed funds, among others.
Arrrived is in the real estate space, offering both partial and full residential investment opportunities through its tech-enabled platform. Once the housing market picks up pace, it will also boost the number of investors looking for affordable housing market investments. In such a scenario, investors will benefit from both Arrived’s fractional investment option and full investment option. Additionally, as interest rates and inflation normalize, vacation rental properties will also see more demand, helping Arrived’s vacation rental property investors.
Positive Outlook for the Alternative Investment Space in 2025
According to research from JPMorgan’s (JPM) Wealth Management division, the alternative investment space is poised for substantial growth in 2025. This is possible owing to stabilizing interest rates and prospective growth drivers such as AI (artificial intelligence).
The five important themes for 2025 include the U.S. housing market, private equity dealmaking, AI-backed demand for new energy infrastructure projects, private credit boom, and accelerated capital investments.
- Sustained Supply Constraints – According to JPM’s research, the U.S. housing market has undergone sustained periods of supply-demand imbalance. In 2024, there was an estimated supply shortage of 2 million to 3 million homes in the U.S. Demand outpaced supply, leading to housing affordability becoming a popular issue, making it a common agenda during the 2024 U.S. Presidential elections. Newly instated President Donald Trump has vowed to make housing affordable again by deporting the millions of refugees who pump up the demand for residences in the nation.
- Favorable Interest and Mortgage Rates – The research notes that the pace of real estate development will accelerate this year, especially as interest rates fall and mortgage rates recede. This trend is expected to be hugely visible in single-family homes and, to some extent, in multifamily apartments, senior residential complexes, and workforce housing.
- Improving Property Valuations – The research also points to the fact that overall real estate development is poised for a big comeback this year, with valuation of properties beginning to recover. Moreover, commercial real estate development is expected to pick up as industries recover and more demand comes for data center infrastructure. Overall, the report guides that real estate development is set to witness solid performance in the coming 10 to 15 years.
Trump’s Pro-Growth Policies Favorable for Private Markets
Interestingly, in another research report for 2025 Private Markets Outlook, Blackrock (BLK) seems to be sharing the same insights for the U.S. real estate sector. Importantly, the report notes that pro-growth policies such as tax reforms and deregulation under Trump’s administration are poised to significantly improve investments in the real estate sector.
Closing Thoughts
Experts predict that the U.S. real estate market, especially residential housing, is expected to present considerable opportunities in 2025. Their research reveals several tailwinds supporting the optimistic view.
Having said that, even in the worst-case scenario, if interest rates fail to normalize to expected levels, the elevated mortgage rates could continue to push eligible homeowners toward rental properties. This would, in turn, keep the housing demand momentum going and help homeownership platforms like Arrived’s bull case continue in 2025.
This article was written in partnership with Arrived. TipRanks may be compensated for its publication.