Q&A: Jen Wichmann of LaSalle discusses the case for investing in real estate debt

Jen Wichmann, senior strategist and senior vice president on the research and strategy team at LaSalle, discusses the case for investing in debt today and long-term trends.

What long-term trends do you see for real estate debt in institutional portfolios, particularly given the evolving regulatory and economic environment in the United States and Europe?

We expect to see institutional investors continue to increase their share of the real estate debt market as banks, who have historically dominated the space, continue to pull back. Regulatory changes have made direct real estate lending less capital efficient for banks in both the U.S. and Europe. As a result, banks have slowed direct originations in favor of providing fund or loan-level back financing, which receives less regulatory scrutiny. This shift is opening the door for alternative lenders to increase their share of the debt market, and these credit funds are expected to facilitate greater allo