Private Real Estate Credit Sees Global Capital Rotation As Investors Seek Durable Income

This article is adapted from an article originally published by PERE Credit. Read the full coverage here.  

Institutional investors are increasingly rotating capital into private real estate credit as they seek income, resilient cashflows and attractive relative value, according to panelists at a recent PERE Credit breakfast briefing co-hosted by SitusAMC in New York. 

The event celebrated the launch of PERE Credit's inaugural ranking of the 100 largest global real estate debt fundraisers and explored the evolving role of private real estate credit in institutional portfolios. The panel featured Matt Salem, Partner and Head of Real Estate Credit at KKR; Bryan Donohoe, Head of U.S. Real Estate Debt at Ares Management; Laurent Jacquemin, Head of North America at BNP Paribas Asset Management Alts; and Anne Jablonski, Head of Commercial at SitusAMC. 

Panelists agreed that private real estate credit continues to benefit from attractive market fundamentals and growing investor recognition.  

"Real estate credit spreads are still offering a premium to other liquid and illiquid asset classes," Donohoe said. "The rotation of capital has also become more global. While there will be winners and losers, we think that hard assets with low degrees of obsolescence are going to provide compelling durable income." 

Salem added that investors increasingly recognize the opportunity within the current market cycle. "There is a sense among investors that it's time to allocate more to real estate or asset-backed credit," he said. 

The panel also discussed how the asset class continues to establish its identity within institutional portfolios. While private real estate credit has benefited from broader private credit allocations, panelists noted that continued education is helping investors better understand its distinct role and long-term value.  

A Global Opportunity 

Global fundraising for private real estate credit continues to grow. According to PERE Credit data, the 50 largest managers raised $304.7 billion during the five years ending in 2025, an 18 percent increase from the prior five-year period.  

While North America remains the largest and most mature market, panelists highlighted growing opportunities in Europe and increasing interest from global investors seeking diversification. 

For firms operating internationally, Jablonski emphasized that success depends on combining local expertise with scalable operational capabilities. 

"Local expertise is essential,” Jablonski explained. “You need professionals who understand the local language, the market dynamics, and the regulatory environment in each region. Equally important is having the technology infrastructure to support global operations, including multi-currency capabilities and systems that can seamlessly ingest and manage data across jurisdictions. The combination of local market knowledge and scalable technology is critical to long-term success." 

Positioned for The Next Phase  

Looking ahead, panelists agreed that market conditions continue to create attractive lending opportunities. Although higher interest rates and lower property values have challenged commercial real estate over the past several years, limited new supply and significant refinancing needs are expected to drive demand for private capital. 

Salem pointed to the large volume of commercial real estate loans maturing over the next several years as a significant opportunity for private lenders. "I think that's a huge lending opportunity for us to step in," he said. "More borrowers are seeking that higher leverage, play-it-forward transitional loan that are more like bridge to sale or refi in the coming years." 

Donohoe also stressed the importance of collaboration between banks and private lenders as the market continues to evolve. "It has to be a partnership between banks and non-bank lenders in order for us to achieve the yields the investors want," he said.  

From a servicing perspective, Jablonski said the industry is moving beyond short-term loan extensions and toward more durable resolutions. "I believe 'extend and pretend' is largely behind us,” she said. “What we're seeing now is a greater emphasis on fresh capital and new skin in the game. During previous recovery cycles, A/B note structures, although difficult to execute, were effective tools. 

"There was considerable discussion [at June's CREFC conference] around revisiting that structure for certain transactions as stakeholders seek practical solutions in their business plans that support asset stabilization," Jablonski added.  

She also highlighted the continued evolution of the private credit market as banks adapt to regulatory strains and non-bank lenders expand their role. "As banks continue to face regulatory pressures, private credit lenders have stepped in to help fill the void,” she said. “It's a market where both types of lenders can coexist and play complementary roles in meeting borrowers’ financing needs." 

The discussion underscored the growing maturity of private real estate credit as an asset class and its expanding role in meeting investor demand for income, diversification and flexible financing solutions in today's market.