There has been a remarkable evolution in non-bank lending across Europe’s commercial real estate debt markets over more than a decade. What began as an urgent response to the fallout from the global financial crisis has matured into a permanent — and a welcome — part of the real estate investment landscape.

Recent INREV data highlights how the initial regulatory triggers have driven a wholesale structural transformation of the European real estate debt and lending market. Instead of competing directly with traditional banks, non-bank lenders, most notably debt funds, have now become a vital part of the financial ecosystem for real estate, not merely filling structural gaps but enhancing liquidity and strengthening resilience across credit cycles. 

The new normal

Post-2008, regulators altered the shape of credit markets. They introduced stringent capital and risk-weighted requirements, forcing traditional banks to delever