Matt Salem, Joel Traut, Patrick Mattson, Rene Theriault and Lindsey Wright

The past 12 months saw nonbanks take increased market share, and the savviest ones give their competitors a run for their money — for example, KKR. 

KKR’s team originated $6.5 billion of loans across 54 deals this past year — up from $4.4 billion the previous year— but that’s only one part of its playbook. It’s also one of the largest investors in the junior tranches of CMBS across both conduit B-pieces and SASB, and has invested $4.6 billion in real estate securities over the last 12 months. 

As the cherry on top, the KKR Real Estate Credit platform grew its capital base to $42.5 billion in assets under management (AUM) as of year end 2024 — more than half of KKR’s $80 billion total global real estate AUM. Whew! 

“The market backdrop continues to improve for real estate, and for real estate finance, and that drove most of our increase in activity,” Matt Salem said. “We’re very fortunate because we have a range of capital, including bank, insurance, mortgage REIT and debt fund capital. Those pools can be turned on or off at any one point in time.” 

Insurance capital was in demand in 2024, and so that’s what a lot of KKR’s activity was centered around. But fast forward to today and there’s more of a balance, with debt fund capital coming in handy where a higher leverage point is required. “Our range of capital was really helpful in a market that was healing over time,” Salem said. 

KKR invests across the risk-return spectrum, as well as up and down the capital stack. It provides both fixed-rate and floating-rate loans, stabilized and transitional loans, senior and mezzanine loans, preferred equity; and SASB and conduit CMBS. 

Multifamily (45 percent) and industrial (39 percent) comprised the majority of its loan book this past year, and KKR picked its spots carefully, screening roughly $197 billion of opportunities but originating only 3 percent of that volume. Roughly 64 percent of those loans were to repeat borrowers. 

Entering 2025, “Our pipeline is at record highs,” Salem said. “The amount of activity we’re seeing is absolutely huge, so that’s a real positive.” 

The opportunities are still heavily weighted toward refinancings, Salem said, with acquisitions comprising around 30 percent of the pipeline — up from 20 percent last year, but roughly half of what it would be in a normal market. 

As nonbanks continue to take greater market share, the competition for deals has increased, Salem said. “We’re competing on price right now because when I think about credit investing, it’s all about safety,” he said. “We like this vintage from a safety perspective, because real estate values are still down 30 percent or so, and you’re lending at big discount-to-replacement costs. The basis that we’re lending at feels very safe, and I always tell people it’s hard to get hurt jumping out the basement window.”

In February 2025, KKR announced the closing of the KKR Opportunistic Real Estate Credit Fund II, a strategy dedicated to opportunistic investments in senior loans and real estate securities in the U.S. and Western Europe. That fund is now over 50 percent deployed. 

The largest property type in the fund is multi-family, with refi opportunities at the fore. “Today, we’re seeing almost stabilized scenarios,” Salem said. “We’re on 90 percent occupied multifamily, but we’re lending at a little bit deeper leverage, so we’ll lend 70, 75 percent loan-to-value.” 

KKR has also started some data center lending in the fund, although it’s playing it cool when it comes to the data center gold rush that is dazzling others. “We’re credit investors, so we’re skeptical people to begin with,” Salem said. “But, we like data centers. We own Cyrus One, after all.”