An introduction to the US non-bank commercial real estate debt market
The $10 trillion US market is the deepest, most mature market globally for both commercial real estate (CRE) debt and equity investments. CRE debt in the US can offer an attractive risk/return profile with returns correlated with interest rates.
The CRE market is currently in the late stages of the cycle with new supply levels rising and interest rates increasing. Regulations are also forcing banks to continue to pull back from non-stabilized assets, creating increasing capacity for non-bank lenders to expand in CRE debt.
This insights paper explains the US CRE investment cycle, strategies through the market cycle, the regulatory environment, the risk/return profile, the characteristics of private debt investment, the investment market and the drivers of supply and demand.
AMP Capital’s capability in this space follows our investment in US real estate investment manager PCCP. PCCP provides commercial real estate debt and equity for middle market real estate investments throughout the US. Its investment products include real estate equity and debt closed-ended funds and separately-managed accounts, and it counts major US public pension plans, commercial banks and insurance companies among its clients.