Distinguishing commercial real estate credit from corporate lending

June 29, 2026 - 07:30

As private credit continues to pull in institutional money, investors are increasingly debating where risks are actually building up across the market. The main point of confusion seems to be between corporate direct lending and commercial real estate credit. In an exclusive interview, John Atwater, co-founder and managing partner at Prime Finance, argues that some market participants are mistakenly lumping these two sectors together, even though they run on completely different fundamentals, collateral structures, and market dynamics.

Atwater explains that each market sits in a different part of the current cycle. Commercial real estate debt, he says, may now be in a stronger position thanks to reset valuations and conservative leverage levels. Meanwhile, as traditional banks pull back, lenders are finding fresh opportunities in the space. The key takeaway is that the risks in corporate private credit are not the same as those in asset-backed commercial real estate lending, and investors should be careful not to conflate them.