Private credit — banks are no longer the marginal CRE lender
In commercial real estate specifically, banks fell to 18% of new CRE loan originations in Q3 2024 (from 38% a year earlier) while alternative lenders rose to 34%. Private credit is now the marginal CRE lender. BlackRock projects global private credit at $3.5 trillion by 2030.
Global private credit AUM reached $1.7–2.0 trillion by 2025. Blackstone Private Credit Fund's NAV reached $44.3 billion as of June 2025. The 2025 executive order opening 401(k) plans to alternative assets, including real estate, materially expands the retail demand pool for these products.
Investor-driven lenders originated 34% of all CRE construction loans in 2025 — top lender type for the second consecutive year. Spreads will normalize as private credit raises more capital. The risk: most private credit underwriting was done in 2022–2024 against a higher-rate base; the next default cycle will test whether nonbank workout capabilities match the rhetoric.
New equilibrium for CRE debt: banks 35–45% (down from 60%+ pre-2020), private credit 25–35%, agencies 15–20%, life companies and CMBS the rest.