Revealed: The Banks Powering Private Credit's CRE Lending Boom
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“Private credit has gone from upstart to unavoidable in just a few years. As traditional lenders grappled with balance sheets battered "by the pandemic-era real estate downturn and new regulatory capital constraints, many reached the same conclusion: If they couldn’t beat private credit, they could at least profit from it.
In the second half of 2025, private credit loans accounted for about $1.4T, or 10%, of the total debt of U.S. nonfinancial corporations, according to the Federal Reserve. Their debt holdings nearly doubled from 2021, when private credit entities held $770B.
By the end of last year, bank credit commitments to other financial entities grew to $2.6T, up from $1.2T in 2018.
“It’s a structure to reduce risk for these banks and a structure to magnify lending capabilities for the individual private lenders,” Case Equity Partners Managing Partner Shlomo Chopp said.
The result is an opaque web of relationships. A mortgage may ultimately be traced back to a major bank, but doing so is nearly impossible. The institution that provides the leverage does not appear on the borrower’s loan documents. Its name won’t show up in any property-level record.
[…] As private credit has grown from a niche corner of finance into a major source of capital, the traditional roles of lender and borrower have begun to blur.
Private equity companies, asset managers and insurers are increasingly both providers and consumers of credit. Unlike their bank counterparts, they’re more willing to take control of an asset in default.
At the same time, as more lending migrates outside the traditional banking system, the market is becoming harder to see and measure. The result is a growing ecosystem where risk is more distributed — but also less transparent.
“Sure, there are large, high net worth investors backing these lending structures, but at the end of the day, a big source of capital comes from allocators, and those allocators are allocating common folks’ money,” Chopp said. “If things get more aggressive, there’s real risk.”
“The takeaway here is that the lender isn’t some guy in an ivory tower,” he added. “It’s you.”