Real estate credit has matured significantly during the past 20 years, evolving from a niche alternative into a sophisticated, strategic allocation for institutional investors.

Investor conversations have shifted. Institutional investors are now much more educated on the strengths of real estate credit, and the focus has moved from why it makes sense to how managers differentiate themselves from the competition.

What makes real estate credit attractive across different parts of the cycle is its defensive nature, the consistency of current-pay first mortgage loans, and its stable performance.

Credit evolution

Several events have influenced the evolution of the real estate credit market, driven by both macroeconomic forces and shifts in investor behavior. The major events include the global financial crisis and more recently, the transition to a high interest rate environment, but there has also been a general shift in investor preferences,