Pullback by banks leaves void being filled by alternative lenders

The current sidelining of bank lending to commercial real estate has had a significant impact on the sector.

U.S. commercial real estate debt totals $5 trillion, making it the fourth-largest fixed income asset class, and banks historically have held roughly 40 percent of all commercial real estate loans, with banks, insurance companies and the government-sponsored entities collectively comprising nearly three-quarters of the overall market. So, a pullback by banks is a challenge for the CRE market.

“Banks are now largely on the sidelines for commercial real estate lending — right in time for a projected record level of loan maturities over each of the next four years,” noted Charlie Rose, global head of credit for Invesco Real Estate. “This dynamic is setting up for an unprecedented opportunity for alternative lenders to originate high-quality CRE loans with limited competition from the historically dominant market players.” Rose added that Invesco Real Estat