Real Estate M&A Surge Points to New Focus on Operational Value, Says Hines Executive

May 4, 2026 - 10:10

A wave of consolidation in the real estate sector is reflecting a fundamental change in how the industry generates returns, with hands-on operational skill replacing financial maneuvering as the main driver of value. Steve Luthman, head of global real estate at Hines, explained that the current uptick in mergers and acquisitions is not simply a recovery in deal volume. Instead, it is being fueled by the emergence of operator-led platforms that prioritize execution over leverage and structure.

According to Luthman, the market is seeing a growing demand for in-house capabilities that go beyond traditional asset management. Firms are no longer content to rely on external operators or passive investment strategies. They are building integrated platforms that allow them to control everything from leasing and property management to development and capital improvements. This shift is reshaping margin potential, as companies that can execute at the asset level are capturing value that was previously left on the table or shared with third parties.

Decision-making is also changing. Luthman noted that the most successful firms are those where operational expertise is embedded in the investment process, not added as an afterthought. This integration allows for faster, more informed choices and a clearer line between strategy and results. The message is clear: in today's market, the ability to improve a property's performance from the ground up is becoming the primary source of competitive advantage, replacing the financial engineering that defined earlier cycles.