If you’re holding CRE assets that need refinancing or repositioning, your next lender probably won’t be a bank.
Private credit will step in more and more in 2026 in areas where traditional financing will likely pull back.
And if you’re not already sourcing term sheets from those lenders, it’s time to start.
Price resets are bringing private lenders back
After a long period of contraction, more lenders are reentering the market, especially now that price corrections have reset valuations and reopened the door to new deals.
Liquidity is returning across property types, and borrowers who were sidelined last year are starting to re-engage.
But banks are not the driving forces behind this rebound. In fact, it’s private lenders who are stepping up.
Banks are bracing for broader instability in the market — and they’ve tightened loan standards because they expect collateral values to fall further, especially in asset classes with unpredictable returns or high vacancy.
Even appraisals are harder to pin down, which makes underwriting more difficult.
On top of that, there’s talk of new capital requirements for large banks, which could force them to limit CRE exposure even more.
That’s created room for private capital to move in.
Private credit funds, family offices, and high-net-worth investors now account for nearly a quarter of US CRE lending, up from a 10-year average of just 14%.
These groups are actively targeting high-yield real estate debt as a diversification strategy.
Globally, the private credit market reached US$238 billion last year and is on track to hit US$400 billion by the end of the decade.
In the US, there’s US$585 billion in dry powder earmarked for real estate.
More insurance firms, retirement platforms, and wealth management groups are also increasing their exposure to real estate by turning to private market strategies as a way to pursue steadier income and stronger performance over time, especially in a market where public assets like stocks and publicly traded REITs remain volatile.
Across the world, 82% of wealth managers say that they plan to put even more money into private real estate and other private investments over the next few years.
Interest from high-net-worth individuals is climbing too, now reaching 19% — that’s the highest level since 2006.
The role of generational wealth
Generational change is driving much of this transition in investment preferences.
As US$84 trillion passes from baby boomers to Gen X and millennials by 2045, a new investor base is forming, and that base seems to be more open to private real estate as a core part of a diversified portfolio.
More private capital is being directed into real estate debt and equity strategies.
Alternative asset managers are adapting by locking in long-term partnerships with insurers and retirement funds.
Blackstone, for example, now manages dozens of strategic accounts tied to insurance capital.
Capital is available — but with conditions
That said, private credit in CRE has become far more selective. These pools of money are more patient — they are not chasing quick wins or reacting to every market dip.
They’re focused on long-term income and protecting their principal, even if that means tying up capital for longer periods.
They also want to see that your asset can support the debt even if rent growth flattens or interest rates stay on the high side.
As a borrower, you need to show consistent income and realistic projections.
Your plan can’t rely on best-case timing. If your deal assumes smooth lease-up or quick refinancing, be ready to stress test it and prove that it will still work if leasing takes longer and expenses come in higher.
Private capital expects institutional discipline.
It’s a different kind of relationship than working with a regional bank or short-cycle lender, and you’ll need to meet those expectations to secure long-term commitments.
Fund your next CRE deal with private credit
Whether you’re repositioning a transitional asset or CRE refinancing ahead of a maturity wall, Private Capital Investors can assist.
We’re not a marketplace or a broker.
We’re a nationally recognized direct lender with over 25 years of experience, more than $8.5 billion funded, and deep relationships across banks, insurance companies, CMBS desks, hedge funds, and private credit.
What sets us apart?
- Direct access to capital – We lend our own funds and through our long-standing correspondent network, so you’re not waiting on slow credit committees or retraded terms.
- Custom structures, not off-the-shelf products – From bridge and mezzanine to permanent debt or JV equity, we tailor financing to match your asset, your strategy, and your timeline.
- Advisory built in – We help structure your deal so it performs in this cycle.
If you’re ready to work with a lender who understands the operational realities of CRE, let’s take a look at your deal and show you what we can do.
FAQs
What is private capital in CRE?
Private capital in commercial real estate usually means money coming from non-bank institutions — debt funds, private equity shops, family offices, and other investors who aren’t tied to deposit requirements or federal lending rules.
Because they make their own credit decisions and many of them have backgrounds in commercial real estate, they move faster than banks and are often more open to CRE deals that traditional lenders tend to avoid.
Private CRE lenders are active in transitional or value‑add assets.
These include buildings that aren’t fully stabilized and projects that need major renovations, re‑tenanting, operational turnaround, and other such heavy lifts that banks often refuse to finance.
Private lenders are less constrained than traditional lenders in some respects because they’re not limited to fixed underwriting models or regulatory capital tests.
They spend less time on thresholds, but spend more time pricing the risk and evaluating your execution plan — they want to see what happens when rent growth flatlines, or your timeline drags beyond what the model can support.
Because private lenders are taking on more execution and asset-level risk, their rates tend to be higher and terms tighter.
You might have to give up more control or agree to heavier reporting requirements.
But if you need to reposition an asset or want to move quickly on a distressed buy, private credit is often the only capital that can move at the speed you need.
How fast can private lenders close a deal?
Timelines vary, but private lenders can often close within 2 to 4 weeks.
They’re much faster than banks (which may take 90 days or more) because they’re not waiting on committee layers or strict regulatory approvals.
What types of CRE deals suit private credit?
Private lenders are open to funding deals that are not straightforward enough for bank financing.
If your property still needs lease-up, for example, or if your credit score isn’t perfect, you can try this route.
Private CRE credit is also suitable for business plans that involve heavy renovations or properties that need to be re-tenanted or repositioned.
And because they close fast, private capital may be the best option if you’re trying to close on a distressed asset before someone else does.
Do private lenders require personal guarantees?
It depends on the lender and the deal, and sometimes also depends on your track record.
Some private credit providers will ask for full or partial recourse, especially for smaller balance deals or if there’s heavy execution risk.
But others will waive guarantees if the asset and the business plan are strong enough.
How do private lenders underwrite deals differently from banks?
Private lenders focus less on borrowers credit scores and more on the asset. Expect them to scrutinize your exit strategy and whether the economics make sense.
Can private capital be used alongside bank debt?
Yes. If your senior loan comes in short, a private lender can supply the additional capital you need to complete the stack.
You can bring in mezzanine financing if construction costs run higher than expected or if your value‑add plan requires more time to stabilize income.
Private credit can also cover a refinancing shortfall.
It allows you to keep the deal moving without restructuring terms or committing far more equity than intended.
What makes a deal attractive to a private lender right now?
Private lenders want to see that your business plan works even with today’s rates and leasing timelines, so show that your numbers hold up without making heroic assumptions.
If you’re working with an asset in a resilient sector like infill industrial, data centers, essential retail, or well-located multifamily, make that demand story very clear.
Spell out how your asset generates income now and how it can do more once your strategy plays out.
Just as important is your track record.
Think about it this way: Private lenders back people, not just properties.
If you’ve executed similar plans before, make sure to highlight that history.
If you are fairly new to the space, bring in experienced partners that lenders already trust. Underwrite conservatively and keep your assumptions tight.
Make sure your ask matches the risk.
