Revealed: The Banks Powering Private Credit's CRE Lending Boom
Michael Lavipour still remembers the bank office where executives laughed him out of the room.
It was 13 years ago, and the head of lending for Affinius Capital was on the hunt for a credit facility to support the investment management firm’s real estate lending practice. As such, he was viewed as the competition.
“Flash-forward to today, that particular institution is no longer doing direct lending and is only providing back leverage,” Lavipour said. “They literally did a full 180 on their business practice.”
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.
In a new database, provided exclusively to Bisnow, credit intelligence platform Atrium Data mapped the growing network to show who’s financing CRE’s private credit boom. To do so, Uniform Commercial Code filings — legal notices filed in Delaware revealing partnerships between lenders and borrowers — were linked to collateral assignments for properties, primarily in New York City.
Many of the financial institutions declined Bisnow’s interview requests. Some of those who agreed to participate in this story could not discuss specific deals or partners in depth due to nondisclosure agreements and other legal hindrances.
Unsurprisingly, the five largest U.S. banks dominate the space, though each has a distinct strategy.
Goldman Sachs has the largest scope, with more than 50 UCC filings across a wide range of fund families to nine private credit operators. Bank of America has the most UCC filings overall, but its lending has been concentrated in relationships with TPG Real Estate and Blackstone.
On the flip side, of JPMorgan Chase’s more than 60 filings, 40 are to fund entities associated with Sculptor Capital Management. Citibank has a strong relationship with Athene Global Funding, Apollo’s insurance subsidiary, with more than 25 filings.
Smaller banks also participate in the network, with many establishing exclusive relationships with private parties, according to the dataset. Stifel Bank only appears to be lending to Oaktree Direct Lending, while City National Bank’s filings seem to be concentrated around Kayne Anderson.
But among the regional and specialty players, Axos Financial, a digital bank with over $28B in assets, stands out. Founded in 2000, the San Diego-based digital bank established itself early on as a lender willing to take a chance on sponsors that its peers would otherwise turn down. That includes affluent foreigners and high net worth individuals with criminal histories.
For the institution, which did not respond to Bisnow’s request for comment, the same seems to apply when it comes to backing private credit. Atrium found that Axos’ credit back-leverage book is the most concentrated of any institution of its size, with a client list that totals at least 30 separate alternative asset managers.
The groups range from giants like the Carlyle Group and Blue Owl Capital to smaller lenders like Madison Realty Capital and S3 Capital.
Emerald Creek Capital co-founder and Managing Partner Mark Penna said Axos was the bridge lender’s first credit provider 12 years ago. The firm has since originated more than $3.5B of loans.
“Axos has definitely been at the forefront,” Penna said. “That relationship has supported us as we’ve scaled and taken on larger deals.”
The relationship structure between banks and private credit firms traced by Atrium typically fell into one of three categories: warehouse lines, subscription facilities and repurchase agreements.
Northwind Group founder and Managing Partner Ran Eliasaf estimated that his firm has closed 10 loans in partnership with Axos, including a $401M mortgage secured by the nearly completed Ritz-Carlton Residences in Palm Beach Gardens in May.
“These are relationships that are built over time,” Eliasaf said. “Sometimes it's deal-specific, sometimes it's around a trend and identifying a certain asset class or strategy that we can co-lend on together.”
Western Alliance Bank, according to Atrium's data, is more inclined to provide net asset value facilities, where it lends against the overall value of a fund's portfolio.
Acore Capital Chief Investment Officer Kyle Jeffers said his firm prefers to diversify across many different types of financing facilities. As a result, it knows which institutions tend to prefer conservative deals with tighter spreads and which are willing to take on more risk, at a cost — though he declined to discuss specific partnerships.
But across the board, banks are expanding their back-leverage platforms. That has driven down borrowing costs for private credit players, regardless of risk, Jeffers said.
“For the first time in our careers, we're receiving inbound calls from our providers saying, ‘Hey, is there anything else you have they could go on the line? We're looking to expand this business,’” Jeffers said.
Despite an uptick in direct lending by banks, the industry doesn’t seem to think that private credit’s power is going to go away anytime soon.
Banks are increasingly looking for ways to deploy capital more efficiently in response to Basel III, a set of regulatory standards requiring larger reserves to strengthen risk management practices. By lending to real estate through an intermediary, banks are able to maintain their exposure but move it to a different location on their balance sheets.
Financing a lender, even if the debt is ultimately funding a real estate transaction, is considered to be a commercial and industrial loan. Since it is backed by a company, not a building, C&I loans are considered less risky under Basel.
“Not to say that they’ll never do a CRE loan, but their bar is a lot higher for their better customers,” Fairbridge Asset Management co-founder and Managing Partner Brian Walter said. “So that's where we step in.”
Today's market of higher interest rates and less equity has forced lenders to become more creative in how they structure financing deals, which opens the door to more private credit sources.
“Banks like things to be a little more vanilla,” Walter said.
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.”
