Why Big Investors Favor Loans Over Equity Now

The Shift Towards Real Estate Debt

Many of the world's largest alternative wealth managers are increasingly investing in real estate debt rather than equity. This shift comes as banks grow cautious about offering large commercial real estate loans. According to Preqin data reported by CoStar, real estate debt investments rose significantly to $9.1 billion in the second quarter from $2.3 billion in the first quarter. This increase is happening as high interest rates and an uncertain economic outlook have made traditional equity investments less attractive.