Real Estate

Why Real Estate Debt & Why Now?

November, 2025 – 5 min read

Commercial mortgages offer similar benefits as private debt along with the security and optionality of real estate equity. Amid a wave of refinancing
needs and reduced bank competition, non-bank lenders are finding stronger structures and better pricing opportunities.

Why Real Estate Debt?

Private real estate debt brings together some of the most attractive features of both private real estate equity and private credit. In the current cycle, investors are positioned to benefit from two mutually reinforcing trends: a substantial wall of maturities coming due for refinancing over the next several years, and reduced competition from certain parts of the banking sector. Together, these factors are expanding the opportunity for non-bank lenders to originate loans on more favorable terms—often with stronger structures and better pricing than in recent years. For both longstanding market participants and newer investors, the forward-looking case remains compelling.

WHAT MAKES IT COMPELLING

Private real estate debt has long been a core component of many institutional investors’ allocations. Its relevance has endured across market cycles and economic environments, largely because it offers investors a variety of ways to pursue attractive risk-adjusted returns. Under the umbrella of real estate debt, investors can target distinct combinations of property type, cash flow profile, capital structure position and geography—tailoring allocations to their own unique objectives and to prevailing market conditions, without abandoning the security that comes from lending against hard-asset collateral.

Private real estate debt can take many forms, but its enduring appeal for investors is rooted in three primary characteristics:

  • Inherent Security
  • Clear Pathway to Potential Alpha
  • Portfolio-Construction Flexibility

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Headshot of Nasir Alamgir smiling at the camera.

Nasir Alamgir

Head of U.S. & European Real Estate Debt
Headshot of Rupert Gill smiling at the camera.

Rupert Gill

Head of European Real Estate Debt Portfolio Management
Headshot of Lincoln Janes smiling at the camera.

Lincoln Janes, CFA

Director, Real Estate Research & Strategy
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Brian Garvin

Associate Director, Real Estate Research & Strategy

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