2025 Specialty Asset Management Outlook Released by Bank of America

Rhea-AI Summary

Bank of America has released its 2025 Specialty Asset Management (SAM) Outlook, focusing on real assets as key portfolio diversification tools amid high interest rates and inflation. The report analyzes commercial real estate, farmland, timberland, and energy assets.

Key findings include:

• Commercial Real Estate shows positive momentum with stabilizing valuations and increasing liquidity
• Farmland presents opportunities as competitive pressures decrease and values remain stable
• Timberland emerges as an attractive low-risk investment, largely insulated from market cycles
• Energy sector trends toward natural gas, renewables, and carbon-friendly sources

The SAM team serves ultra-high-net-worth clients through Bank of America Private Bank and Merrill, managing timber, farm and ranch land, oil, gas, mineral interests, real estate, and private businesses. The bank serves approximately 69 million consumer and small business clients through 3,700 retail centers and 15,000 ATMs, with 59 million verified digital users.

Positive

• Growing investor confidence in Commercial Real Estate with stabilizing valuations and increasing liquidity
• Bank of America's extensive specialty asset management expertise serving ultra-high-net-worth clients
• Strong market presence with 69 million consumer/small business clients and 3,700 retail centers
• Robust digital banking platform with 59 million verified users
• Diversified revenue streams through real assets management services

Negative

• Elevated long-term interest rates affecting investment landscape
• Persistent inflation impacting market conditions
• Farmland values remain stable to slightly lower
• Complex risk considerations in nonfinancial assets including potential total loss of value
• Market challenges in Commercial Real Estate sector over past few years

Amid elevated long-term interest rates and persistent inflation, investors turn to real assets to help mitigate market risk

CHARLOTTE, N.C., April 30, 2025 /PRNewswire/ -- Today, Bank of America released a 2025 Specialty Asset Management (SAM) Outlook (PDF) on the market dynamics impacting commercial real estate (CRE), farmland, timberland and energy assets. The paper finds real assets play an increasingly important role in diversifying a portfolio as investors seek to position themselves for long-term wealth creation in a dynamic market.

"Characteristics of real assets, such as generally being uncorrelated with traditional investments and serving as a hedge against inflation, are increasingly relevant in the current environment," said Ken Shepard, SAM Executive at Bank of America Private Bank. "For well-informed, long-term investors, 2025 will be a good year to selectively build positions in certain real asset sectors."

The following themes are explored in the 2025 SAM Outlook:

• CRE demonstrates positive momentum: While CRE has weathered a range of challenges over the past few years, investor confidence in the space is growing, signaled by rebalancing supply and demand, stabilizing valuations and increasing liquidity.
• Farmland offers a pathway to stability and diversification: The 2025 crop year holds opportunity for knowledgeable investors as competitive pressures lessen and farmland values remain stable to slightly lower, allowing for more strategic maneuvering.
• Timberland bridges market uncertainties: Long-term investors with lower risk profiles in search of alternatives may find timberland an attractive investment, as biological growth is largely insulated from market cycles and geopolitical risk.
• Energy use increases globally: Myriad factors, including population growth, expanding manufacturing and rising living standards in emerging economies, have paved the way for increased energy usage. Looking ahead, the domestic energy supply will favor natural gas, renewables and other carbon-friendly sources.

Bank of America's SAM team has extensive experience managing timber, farm and ranch land, oil, gas and mineral interests, real estate and private businesses. The team works with ultra-high-net-worth Bank of America Private Bank and Merrill clients who own or seek to acquire real assets, as well as provide a wide range of services in managing these complex assets.

Learn more about diversifying wealth through nonfinancial assets.

Bank of America

Bank of America is one of the world's leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 69 million consumer and small business clients with approximately 3,700 retail financial centers, approximately 15,000 ATMs (automated teller machines) and award-winning digital banking with approximately 59 million verified digital users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business households through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and more than 35 countries. Bank of America Corporation stock is listed on the New York Stock Exchange (NYSE: BAC).

Bank of America Private Bank is a division of Bank of America, N.A., Member FDIC and a wholly owned subsidiary of Bank of America Corporation.

Nonfinancial assets, such as closely-held businesses, real estate, fine art, oil, gas and mineral properties, and timber, farm and ranch land, are complex in nature and involve risks including total loss of value. Special risk considerations include natural events (for example, earthquakes or fires), complex tax considerations, and lack of liquidity. Nonfinancial assets are in the best interest of all investors. Always consult with your independent attorney, tax advisor, investment manager, and insurance agent for final recommendations and before changing or implementing any financial, tax, or estate planning strategy.

Investment products:  

Are Not FDIC Insured

Are Not Bank Guaranteed

May Lose Value

For more Bank of America news, including dividend announcements and other important information, visit the Bank of America newsroom and register for news email alerts.

Reporters may contact:

Julia Ehrenfeld, Bank of America
Phone: 1.646.855.3267
julia.ehrenfeld@bofa.com

MAP7872298

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SOURCE Bank of America Corporation

FAQ

What real assets does Bank of America (BAC) recommend for investors in 2025?

Bank of America recommends four main real asset sectors for 2025: commercial real estate (showing positive momentum), farmland (offering stability), timberland (for lower risk profiles), and energy assets (particularly natural gas and renewables).

How is commercial real estate (CRE) performing in Bank of America's 2025 outlook?

According to Bank of America's 2025 outlook, CRE is showing positive momentum with rebalancing supply and demand, stabilizing valuations, and increasing liquidity, indicating growing investor confidence in the sector.

What is Bank of America's 2025 farmland investment outlook?

Bank of America's 2025 outlook indicates farmland offers investment opportunities due to lessening competitive pressures and stable to slightly lower farmland values, creating conditions for strategic investment positioning.

Why does BAC recommend timberland investments for 2025?

Bank of America recommends timberland for long-term investors with lower risk profiles because its biological growth is largely insulated from market cycles and geopolitical risk, making it an attractive alternative investment.

What energy sectors does Bank of America favor in its 2025 outlook?

Bank of America's 2025 outlook favors natural gas, renewables, and other carbon-friendly energy sources, driven by factors including global population growth, expanding manufacturing, and rising living standards in emerging economies.

How can investors use real assets to protect against inflation in 2025?

According to Bank of America's SAM outlook, real assets help protect against inflation by being generally uncorrelated with traditional investments, making them valuable for portfolio diversification in the current high-interest rate environment.