The COVID-19 pandemic has introduced dislocation within real estate markets, and lending markets have experienced some shake-ups. That has meant potential debt-investment opportunities.

“The current commercial real estate lending market is favorable and offers attractive risk-adjusted returns for investors who are well capitalized and able to respond nimbly to what we expect will be an evolving opportunity set,” says Matt Salem, partner and head of KKR’s Real Estate Credit business.

In mid-autumn 2020, the Federal Open Market Committee warned small- and medium-size banks could face stress from defaults on loans to commercial real estate if consumers continued to avoid traveling and shopping. That was also a concern for the real estate debt–fund industry; in the aftermath of the great financial crisis, more-stringent banking regulations were put in place, and since then, banks have been underwriting the most secure property loans. In short, the banks had the bes