A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox.

Private investment firms of the ultra-wealthy are snapping up domestic real estate as the market’s recovery continues to stall, family office investors told Inside Wealth.

While persistently high interest rates and geopolitical conflicts have many investors sitting on the sidelines, family offices can afford to make opportunistic bets as they invest for the long haul.

Travis King, CEO of Realm, said the collective of some 100 families has invested about $100 million in Northern California real estate in the past six months. Realm has seized on bargains, such as buying an office property in San Francisco at about 21% of what it last traded for and what it could cost to build it today.

“We looked at it and said, ‘Hey, San Francisco has been beaten up, but we believe that tech is going to continue to be a very robust environment, and we continue to believe that that’s going to be the main driver of the U.S. economy going forward. We don’t think San Francisco is going anywhere,'” he said. “It seems like that call is accurate, based on the fact that we’re now trading paper on either leases or purchase and sale agreements on several of these properties.”

King said some families are nervous about deploying their money during these turbulent times, but that more are interested in taking advantage of low valuations.

“It’s a difficult time to live through, just as a citizen, but it’s an interesting time as an investor, because that’s the time that makes it the best pricing,” he said.

Matthew Cohen, partner at Declaration Partners, the investment firm anchored by Carlyle billionaire David Rubenstein’s family office, said the firm’s long investment horizon allows it to seize opportunities that traditional asset managers cannot.

Declaration Partners closed its second real estate investing fund in October, raising about $303 million. It has made a flurry of deals in recent months, such as signing a $50.1 million master lease for three storefronts in New York City’s SoHo neighborhood. While the tenants’ current rents are below market rates, Declaration Partners’ lease spans 25 years, with an option to extend to 2091.

“A lot of institutional funds look at opportunities like that and say, ‘If I can’t execute a business plan in a year and a half or in two years or three years, that’s not quick enough,'” Cohen said. “It required somebody who had the longer-term perspective to say, ‘I’m willing to hold longer term to wait out the expirations of those leases,’ and the patience and flexibility to work with a private owner to come up with a structure that was mutually beneficial.”

Family office surveys have indicated ambivalence toward real estate investing, but those in the U.S. have been more optimistic.

A J.P. Morgan Private Bank poll, released in February, found 35% of U.S. family offices planned to increase their exposure to real estate, while only 24% of their international peers said the same. A whopping 40% of respondents also reported no allocation to real estate.

However, family offices that cited inflation as the top risk to their portfolios reported an average 16.3% allocation to real estate, twice that of the general respondent pool.

“Any time inflation becomes an issue, people start investing in things that they can see and touch,” said Cozen O’Connor real estate lawyer Jennifer Nellany.

Jason Ozur, CEO of wealth manager Lido Advisors, said that even with low acquisition prices, investors have to heed many factors, like leverage costs and rising insurance costs, to beat inflation. Lido Advisors has been able to invest in attractive multifamily properties at 20% to 30% discounts to replacement costs, he said. The firm is focused on major cities like Salt Lake City, Denver and Dallas, he added.

Ozur said cash flow and portfolio diversification are stronger draws for clients to invest in real estate. He also described real estate as a tax-efficient asset, citing strategies such as depreciation deductions and 1031 exchanges, which allow real estate investors to defer capital gains by reinvesting gains in a like-kind property. Clients can also gift real estate to their children at discounted values over time, he said.

As for data centers, the hottest asset class in commercial real estate, Nellany said family offices find it hard to invest at attractive price points. She also said that some family offices, especially those with a philanthropic bent, are concerned about the environmental impact of data centers.

Real estate investor Chaz Lazarian is doubling down on office real estate, often considered the least attractive area of commercial real estate, through his firm, Elle Family Office.

Lazarian said he snaps up distressed assets at severe discounts. He said he acquired the former Home Depot headquarters building in Atlanta and its debt for about $21 million, paying about 18 cents on the dollar when he bought it in October compared with what its private equity owner paid in 2019.

While that property has been kept as an office building, he has razed others to build multifamily housing. Unlike many family office principals, Lazarian does not invest for the long term, aiming to flip properties in two to three years.

“I think generational wealth can be created by taking some risks,” he said. “This opportunity didn’t exist in 2007, 2008, and we just want to rinse and repeat as many times as we can until the market dries up.”