US proves itself as an attractive lending market

The ranking’s biggest lenders were PGIM and KKR, lending a combined total of $74.2bn between 2018 and 2022.

Alongside the Debt Fund 40 ranking, Real Estate Capital USA asked the managers to reveal the volume of lending they completed in the US from the start of 2018 to the end of 2022. A total of 27 out of 40 provided data, revealing they collectively deployed $345.5 billion over the five years ending in 2022.

PGIM Real Estate recorded the highest lending volume, loaning $42.4 billion over five years. This was followed by KKR, which lent $31.8 billion over the same period.

Out of the ranking’s top 10 capital raisers, five were also among the top 10 highest lenders. Aside from PGIM, these were: Berkshire Residential Investments, lending $16.8 billion; Affinius Capital (formerly Square Mile Capital), lending $30.6 billion; ACORE Capital, lending $27.8 billion; and Rialto Capital Management, lending $13.6 billion. The rest of the top 10 lenders included Madison Realty Capital, PCCP, Nuveen Real Estate and Barings.

Overall, the data shows strong appetite in the US for alternative lenders, and current market conditions should only enhance this further. In April, Blackstone’s president and chief operating officer Jon Gray highlighted that now is a good time to be a lender: “I think our real estate debt business is in a really great spot today. Banks are quite focused on commercial real estate exposure, shareholders, regulators, and that is leading to a pullback. So if you have fresh capital to deploy in that area, I think it’s quite positive.”

As more banks continue to retreat from the real estate financing market due to difficult sector conditions, more alternative lenders will likely look to take advantage of emerging gaps in the market. As a result, lending volumes are likely to increase next year.