The high-interest-rate environment has recently exerted substantial stress on the U.S. banking sector, compounded by a weakening commercial real estate market. Regional banks play a crucial role in commercial real estate, often financing small and midsized commercial projects that larger banks may overlook. These banks, with assets below $150 billion, have accounted for roughly two-thirds of all commercial real estate bank lending since the global financial crisis, according to Trepp’s Bank Navigator database (hereinafter referred to as Trepp).

Even though the collapse of several regional banks in 2023 was unrelated to bad commercial real estate loans, there is growing pressure on these banks to reduce their commercial real estate exposure due to high concentration levels. As regional banks reduce commercial real estate lending and offload loans, significant opportunities arise for private lenders and investors. This shift allows private lenders to step in and offer tailore