As traditional bank lending remains depressed amid high interest rates, some commercial real estate lenders are turning to another source of fresh capital — insurance companies.

The well has gone dry for many private lenders looking to fund commercial real estate activity over the past two years. But insurance companies have capital ready to go, and more are tapping into a source that is eager to invest in the sector, Commercial Observer reports.

“We have done pretty well in providing a suite of services to that group,” ACORE Capital CEO Warren de Haan told Commercial Observer. “It’s a group that continues to grow as, unlike the banks, there’s not a retracement in the insurance industry.”

The provider of CRE debt has partnered with insurers since its inception in 2015 and has recently stepped it up.

Other private lenders have followed suit in seeking insurance funding, with interest rates at their highest in 22 years and banks mostly waiting it out ahead of several expected rate cuts later this year. And insurers, especially those with pension funds, are ready to deploy capital, according to Kristen Fallon, a partner in the real estate practice at law firm Nixon Peabody.

“When we had our low interest rate environment, those sources of capital had been largely overlooked and they are probably going to see a resurgence of interest, particularly as these maturities hit,” she told Commercial Observer.

Insurance firms could offer takeout financing for upcoming loan maturities or construction debt, she said, although she cautioned that most would avoid mezzanine or other types of riskier financing.

Insurance company Prudential partially funded its own asset management arm, PGIM Real Estate, with an open-ended debt fund about six years ago. The fund has since grown to around $5B. Melissa Farrell, head of debt originations at PGIM, told Commercial Observer an overall high interest rate environment is a boon for insurance investors looking to make higher returns.

PGIM benefits most from pension risk transfers, where companies look to offload their liabilities over to big insurance companies, like Prudential, she said. PGIM’s debt fund is more focused on floating-rate loans for transitional-type assets. More typically, Farrell said, conventional life companies are seeking longer-duration, fixed-rate CRE investments.