Private Real Estate Debt: A Banner 2025, With More Room To Run

Principal Financial Group1.22K FollowersFollow5ShareSavePlay(13min)CommentsSummaryTotal loan originations increased 47% year-to-date through 3Q 2025, reaching their fifth-highest level since 1Q 2002.Risk-adjusted returns remain compelling, supported by conservative loan-to-value ratios on property values that have already reset by roughly 20%.CRE debt funds have much lower volatility than both private corporate credit and private equity over longer periods of time.Commercial real estate debt delivered strong performance in 2025 and is well-positioned for continued success in 2026 and beyond. wildpixel/iStock via Getty Images By Rich Hill, Global Head of Real Estate Research & Strategy Introduction Total loan originations increased 47% year-to-date through 3Q 2025, reaching their fifth-highest level since 1Q 2002. Outstanding mortgage debt rose to nearly $4.9 trillion as of 2QThis article was written byPrincipal Financial Group1.22K FollowersFollowThe Principal Financial Group (The Principal®) is a global investment management leader offering retirement services, insurance solutions and asset management. The Principal offers businesses, individuals and institutional clients a wide range of financial products and services, including retirement, asset management and insurance through its diverse family of financial services companies. Founded in 1879 and a member of the FORTUNE 500®, the Principal Financial Group has $519.3 billion in assets under management1 and serves some 19.7 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States.

Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com. Insurance products issued by Principal National Life Insurance Co (except in NY) and Principal Life Insurance Co. Plan administrative services offered by Principal Life. Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc. Securities offered through Princor Financial Services Corp., 800/247-1737, Member SIPC and/or independent broker/dealers. Principal National, Principal Life, Principal Funds Distributor, Inc. and Princor® are members of the Principal Financial Group®, Des Moines, IA 50392. Investing involves market risk, including possible loss of principal.