Private debt in commercial real estate has probably doubled since 2019, and it may have grown even faster. The estimate comes from BGO Chief Economist Ryan Severino, who says the industry’s credit market has gone through a quiet but significant rebalancing. Banks, insurance companies and securitization still matter. But private capital has grown much faster than any of them, and Severino thinks that’s mostly a good thing for the market, provided investors can see the risks clearly.

“You had your traditional pools of credit,” Severino tells GlobeSt.com. Balance sheet lenders such as banks and insurance companies anchored the market, securitization joined them in the 1990s, and private capital operated more quietly in the background. That’s no longer the case.

“What you’ve really seen the rise of [is private capital]. You’ve seen it grow so much faster,” he says. Much of that activity runs through CRE investment funds, though the category is broader.

The Fed Puts a Number on Private Credit

Private credit got new attention when the Federal Reserve folded it into the country’s official financial accounts.

The first numbers show how large the sector has become. As Severino wrote in a recent LinkedIn post, “The new classification’s year-end-2025 figures show approximately $1.5 trillion in private-credit loans across covered vehicles. Domestic nonfinancial businesses owe about $1.3 trillion, representing roughly 6% of their total debt, compared with roughly 1% in 2012. Therefore, the Fed’s new framework gives us a clearer picture of existing business borrowing.”

Estimating the CRE Slice

The Fed’s new data has one gap that matters to real estate investors. It doesn’t break out commercial real estate private credit on its own.

So Severino built his own estimates of how much private CRE debt grew from 2019 to 2025, using low, central and upper scenarios. In the low case, cumulative growth was 80%. The central case puts it at 100%, meaning private CRE debt doubled over the period. The upper case comes in at 132%.

Even the most conservative figure describes a lending source that has grown substantially in a short period.

Why More Lenders Could Help the Market

Severino sees real benefits in that growth. “There’s a good market completeness argument,” he says. In his view, having more layers of capital available to borrowers can strengthen the market.

The payoff isn’t necessarily higher returns. It’s a better fit between the money and the deals that need it. “Does it make the market more efficient?” he asks. “Not better returns necessarily, but can we allocate capital more effectively between sources and uses? It’s robust enough that maybe it does serve an unmet need?”

Transparency Is the Catch

The growth comes with concerns. When investors can’t see clearly into private credit vehicles, they can react quickly, and that kind of reaction has led to the redemption runs a number of private credit firms have faced over the last few years. Private lenders also don’t carry the regulatory capital requirements that can help keep traditional lenders stable.

Severino says those risks don’t cancel out the benefits, but they do set the terms. “As long as we’re not underestimating the risks and as long as the risks are transparent to us enough, there is an argument that it does make the sector more efficient in terms of matching sources of capital with uses of capital,” he says.