Private Credit vs. Commercial Banking: Neck and Neck

Three years after the regional banking crisis of 2023, and a solid 15 years since private credit went mainstream following the 2008-2009 Global Financial Crisis, it’s abundantly clear that the lending landscape across U.S. capital markets is one of pure, unadulterated competition. 

Private credit advocates argue commercial banking is a thing of the past and that debt funds are the future, as their bespoke solutions offer versatility while their nimble teams of specialized originators create more personal lending relationships. 

“The banking model continues to be broken, and the ability for private lenders like Peachtree to step in and help fill the gap is only growing with the wall of debt maturities,” said Greg Friedman, managing principal and CEO at Peachtree Group, a debt fund that originated $3 billion of loans in 2025. 

Friedman added that his firm saw “huge amounts of opportunities” in 2025 to step in with either direct lending or buying underwater loans outright, which gave his team the chance to restructure deals back into performing loans. 

Other private credit firms, like 3650 Capital, which originated $2.1 billion of deals in 2025, believe their bespoke creative solutions are buttressed by white-glove service that borrowers typically find at life companies or relationship banks.

“What we’re interested in doing is capturing the borrowers who are true real estate professionals and who appreciate our differentiated approach,” said Jonathan Roth, co-founder and managing partner at 3650 Capital. The firm has a rule that any client must be called back within 24 hours, Roth noted. 

But banks will not retreat after a few difficult years under a higher interest rate regime. 

The nation’s top commercial bankers carry the weight of tradition and safety, with long-standing federal regulations protecting fortress-like balance sheets, and their advocates argue that only large, international banks have the ability to originate and securitize the biggest CMBS loans. 

“In a highly competitive market, you need a good origination setup, CMBS capital market skills, and you need to have a distribution network and a good secondary trading floor to give liquidity to the business,” explained Dino Paparelli of Deutsche Bank. “We have all of this — we compete.” 

UBS’s David Nass, whose team did $10 billion across CMBS, balance sheet and mortgage loans in 2025, said his team developed six distinct businesses across its real estate finance platform that combines balance sheet and CMBS opportunities with its back leverage business. 

M&T Bank’s Matt Petrula said his bank’s origination activity is able to jump from construction financings to permanent loans, bridge loans and corporate facilities with the utmost ease. 

“Our platform provides a product for every phase of the life cycle of that asset,” said Petrula. 

May the best lender win.

Brian Pascus can be reached at bpascus@commercialobserver.com.