Shadow lenders take bigger slice of real estate debt

New York

HEIGHTENED scrutiny of US commercial real estate lending is paving the way for lightly regulated investors to gain a bigger toehold in lucrative deals.

Private funds are seeking a record US$32 billion for commercial property debt as buyout firms, real estate investment trusts (Reits) and hedge funds expand lending. These companies, which typically charge higher interest rates, can move quickly on large loans that may be seen as too speculative for banks.