Multiple funds told Reuters they planned to increase their credit exposure to property as banks back off from commercial real estate.

At Inman Connect Las Vegas, July 30-Aug. 1, 2024, the noise and misinformation will be banished, all your big questions will be answered, and new business opportunities will be revealed. Join us.

Large investment funds are betting big on the beleaguered commercial real estate sector as banks pull back, according to a report in Reuters.

Funds PGIM, LaSalle, Nuveen, Brookfield, QuadReal, M&G, Schroders, Aviva and others all told Reuters they planned to increase their credit exposure to property, with most funds focusing on multi-family properties, logistics, data centers and high-end office space, which continues to show signs of distress, according to the report.

“If I look at our strongest bet currently, it’s probably real estate debt,” Isabelle Scemama, who leads AXA’s alternative investments operation told Reuters. 

Lasalle Investment Management, which manages a global portfolio of $89 billion, told Reuters its target was to grow its real estate debt investments by 40 percent to around $7.6 billion over the course of the next two years, targeting distribution, hospitality and student housing properties.

Offices continue to undergo their biggest slump since the 2008 financial crisis, spurred by remote and hybrid work policies. Over $38 billion worth of office space currently faces the threat of default, and building owners who bought during pandemic-era high real estate values are now selling for half off 0r more.

However, fund managers told Reuters they believe the worst has passed, and the market is ripe for opportunity.

“Historically through real estate cycles, you would find that generally loans made at the bottom of the cycle… tend to have the lowest delinquency rates and the highest spreads,” Jack Gay, global head of debt at Nuveen told the newswire.

Private equity outfits are also getting in on the market, according to the report. Apollo Global Management has reportedly launched a dedicated European real estate debt fund with a target of a billion Euros by next year, a source told Reuters. 

And while banks at large have pulled back heavily from commercial real estate loans, the fund management arms of some major banks are leaning in. Goldman Sachs Asset Management disclosed on Monday that it had closed a real estate credit fund with over $7 billion in lending capacity — its largest to date.

Email Ben Verde

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription