Real estate The maturity wall and the case for private credit

Invesco Real Estate's managing director Justin Chausse reflects on the firm being a three-time winner of 'Real Asset Manager of the Year' and explains why a market that seemed to be heading in one direction is now heading in another—and the opportunity this brings for investors.

By Pete Carvill, Insurance Asset Risk

Insurance Asset Risk (IAR): Congratulations on winning the award for 'Real Asset Manager of the Year' for the third time in a row¹. A big part of your success over those years has been in your platform and the role that your firm plays in the commercial real estate (CRE) market. I thought we could begin by having you walk our readers through those two things first.

Justin Chausse (JC): Sure. Invesco Real Estate is one of the world's largest real estate platforms. We have about $90bn² in assets under management across equity and debt strategies, and it's that breadth that allows us to evaluate opportunities through both an owner's and a lender's lens across the risk-return spectrum. Within CRE debt, we've originated about $30bn of loans over the past ten years³, and today we're ranked as the fourth-largest bridge lender according to the Mortgage Bankers Association⁴. And when it comes to recent origination volume, we originated $4bn in loans last year and we're up to $5bn so far in 2026.⁵

IAR: Those are some serious numbers. Where on the spectrum of CRE lenders do you play?

JC: The platform invests across senior bridge loans, construction loans, mezzanine debt, and preferred equity. Our focus is on institutional-quality real estate and institutional-quality borrowers. Where we fit in the market is in a distinct position between traditional balance-sheet lenders and those who are more opportunistic capital providers. Rather than competing to provide low-yield financing on stabilised assets, we focus on transitional situations where borrowers are looking for certainty, flexibility, and thoughtful structuring. Today that often means balancing financing quality assets that are facing capital markets challenges rather than real estate impairment.

IAR: What would those challenges be?

JC: There are a number of things that come up. It may be navigating maturities or recapitalisations. There's also lease-up periods, redevelopment programmes, or other transitional situations which require customised financial solutions. Those are areas where private credit can be particularly valuable and where we believe lenders are being well compensated for the risks they assume.

IAR: How does your lending differ from that done by insurance companies directly?

JC: Insurance companies tend to focus on lower leverage, investment-grade mortgage lending that is designed to support their general account portfolios with predictable cash flows and capital preservation. Where we differ is that we have a range of structures that include bridge loans, construction financing, mezzanine, preferred equity, and other structured-credit opportunities. In many cases, we are financing assets and capital needs that fall outside the traditional life company lending box. The objective is not necessarily to take more risk, but to capitalize on complexity and market dislocation through disciplined underwriting, structuring, and asset management. For insurance investors, we can serve as an extension of their real estate credit platform providing access to segments of the market that may be difficult to source, underwrite, or manage internally, while maintaining the discipline and collateral-based downside mitigation they value.

IAR: One of the topics that came up last year was interest rates. Back then, the assumption was that they would fall. As a consequence, we spoke a lot about where that would lead the market. But the opposite has happened and they've remained steady with the intimation of possibly rising.

JC: What a difference a year makes! We believe this environment has created one of the most-attractive spots for CRE credit investors in more than a decade. The opportunity is less about the absolute level of rates and more about the dislocation they have created across real estate capital markets. Many properties were financed in a low-rate environment—now, those same borrowers are ncreasingly needing to look towards private capital solutions while banks and traditional lenders are constrained. That allows lenders like Invesco to achieve lower leverage levels, stronger structures, and more-favourable documentation than we saw during much of the prior cycle, all while earning wider spreads.

IAR: Are there short- and long-term opportunities here?

JC: Of course.

IAR: How would you differentiate between them?

JC: In the short-term, the opportunities stem from the large volume of loans that need to be refinanced over the next several years. We call this the 'maturity wall'. Many borrowers still need capital solutions to address upcoming maturities, to fund business plans, or to recapitalise assets. This creates a robust near-term pipeline of transactions and allows lenders like us to remain selective.

IAR: And in the long term?

JC: That's more structural in nature. Even if policy rates decline, we believe the lending landscape has been fundamentally changed. Banks are likely to remain more disciplined than they were before 2022, and borrowers increasingly value the certainty, speed, and flexibility that private lenders can provide. It's because of that that we believe private real-estate credit will continue to command a larger percentage share of commercial real-estate financing than it did in previous cycles.

IAR: You sound optimistic.

JC: We believe we're in the early-to-middle stages of a refinancing cycle that could continue like this for several years. For investors, it's not a way to bet on rates remaining high, but an opportunity to bring scarce capital into a market that's resetting significantly. At the same time, they're benefitting from attractive income and strong lender protections.

IAR: Given everything we've spoken about, what's the most-compelling area of the market over the next two, three, or four years?

JC: We think about this a lot given we invest across both equity and debt, along with up and down the risk spectrum. So over the next few years, we believe higher-yielding CRE credit offers one of the most-compelling opportunities. That includes gap financing, construction loans, and acquisition loans where buyers are seizing on the opportunities that come from those being forced to capitulate and recapitalise or sell their properties.

About Risk

Investing in commercial real estate assets involves certain risks, including but not limited to: tenants' inability to pay rent; increases in interest rates and lack of availability of financing; tenant turnover and vacancies; and changes in supply of or demand for similar property types in a given market.