How Independent Valuations Can Help Alternative Lenders Raise Capital

In 2024, alternative lenders faced significant headwinds: More real estate funds were closed, but less capital was raised, resulting in smaller fund sizes. The $85.6 billion raised in 2024 was down 15% from 2023, and a little over half of the amount raised in 2021. Last year the average North American real estate fund size was $231.2 million, down 37% year over year and approximately half of 2020’s $451.4 million peak.

As competition to attract capital for alternative lending activities grows, more funds are seeking to differentiate themselves and gain a competitive edge. SitusAMC’s new white paper, “Transparency, Consistency, Best Practices: 3 Ways Independent Valuations Position Alternative Lenders for Success” looks at why valuations are crucial to raising capital.  

"In an illiquid environment, investors really need clarity, and regular valuations achieve that, allowing them to understand the market value of their assets,” said Tom Dial, SitusAMC Senior Director, Commercial Real Estate Debt Valuation. “Also, as part of their diligence process, investors are more frequently requiring fund managers to employ an independent third-party valuation firm, rather than conduct valuations internally.” 

SitusAMC values $130 billion in debt quarterly for 100+ clients across the U.S. and EMEA, including CRE loans, commercial mortgage-backed securities (CMBS) and CRE collateralized loan obligations (CLOs), both existing and new originations. Those assets may be senior loans, mezzanine loans or preferred equity --  or CMBS securities rated from triple A down to triple B and unrated bonds.  

“Alternative lenders can gain a competitive advantage by leveraging best practices across asset management, accounting, compliance, valuations and reporting,” Dial said. “Best practices show the market that you're a solidly established organization with proper infrastructure in place, positioning you to weather any storm better than competitors. This should help raise money, since large investors demand solid controls.” 

Download the white paper, “Transparency, Consistency, Best Practices: 3 Ways Independent Valuations Position Alternative Lenders for Success,” here. Learn more about SitusAMC’s CRE Debt and Securities Valuations and Advisory Services here.