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Banks Are Pulling Back: Why Private Real Estate Debt Is Surging with Chris Carsley

Mar 4, 2025

Chris Carsley, a private real estate debt expert from Kirkland Capital Group, dives into the evolving landscape of non-bank lending. He discusses how traditional banks' retreat has allowed private lending to thrive, particularly through short-term bridge loans yielding attractive returns. Carsley emphasizes the importance of operational due diligence and understanding key risk factors like valuation and loan-to-value ratios. He shares insights into liquidity concerns and how private real estate debt can diversify an investment portfolio in today's volatile market.

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Intro

00:00 • 2min

The Rise of Private Debt Investment

01:51 • 6min

Navigating Private Debt in Real Estate

07:50 • 8min

Navigating Transparency in Private Real Estate

16:05 • 7min

Navigating the Private Debt Landscape

22:54 • 9min

Navigating Private Real Estate Debt and Investment Flexibility

32:06 • 5min

Exploring Opportunities in Private Real Estate Debt

37:12 • 4min

Paul Shannon hosts an in-depth chat with Chris Carsley of Kirkland Capital Group to explore the growing world of private real estate debt. Chris explains how private lending is filling financing gaps left by traditional banks, why short-term “bridge” loans for smaller commercial deals can yield competitive returns, and what operational due diligence steps every LP should take before investing. From the basics of senior debt to navigating leverage, liquidity, and redemptions, Chris shares real-world insights into the risks and rewards of building private credit into a balanced portfolio—especially amid today’s market volatility.

Today’s Episode Takeaways

Why Private Debt Exists: How regulatory changes and market gaps since 2010 have fueled the rise of non-bank lending.
Fixed-Income Diversification: How private real estate debt contrasts with traditional bonds—and the potential for uncorrelated cash flow.
Key Risk Factors: Why valuation, low loan-to-value, and conservative underwriting matter for principal protection.
Due Diligence 101: Questions to ask fund managers about leverage use, past defaults, and changes made after deals go wrong.
Liquidity vs. Illiquidity: Understanding fund “gates,” redemption structures, and how to fit private debt into an overall strategy.

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