For years, commercial real estate lending has been framed as a contest between banks and private credit. As private credit grew after the global financial crisis (GFC), and again after the 2023 regional banking disruption, many observers read it as one side taking share from the other. That narrative is outdated. The relationship today is complementary and understanding why matters for how investors evaluate credit managers and how borrowers think about capital.
Banks were once the backbone of CRE finance: the lowest cost of capital, deep borrower relationships, a natural focus on stabilized assets with predictable cash flows. Private lenders grew up addressing what fell outside that box: transitional properties, larger deals, complex business plans, situations requiring more flexibility. The two occasionally competed at the margin, particularly late in a cycle when banks pushed leverage higher. But the products were rarely identical, and what has changed since is the structu
