Charlie Rose

Is it better to be a lender or borrower today? 

We believe it is a particularly attractive time to be a commercial real estate lender. 

Commercial real estate credit, which represents an approximately $8 trillion addressable market across the U.S. and Europe, is benefiting from several structural tailwinds. These include a significant wave of loan maturities, reduced competition from traditional banks and a higher-for-longer interest rate environment that supports floating-rate lending strategies.

We are seeing these dynamics translate into increased lending activity. Across Invesco’s broader real estate credit platform, originations were up 65 percent year-over-year, with credit standards remaining consistent. Overall, this is an attractive environment to generate current income while maintaining a disciplined approach to downside protection.

Which property sector is most attractive from a lending perspective today, and which are you most cautious about?

We continue to have the greatest conviction in multifamily and industrial properties, which

account for approximately 90 percent of our portfolio. These sectors benefit from diversified demand drivers, favorable long-term fundamentals and supply constraints resulting from elevated construction costs and higher interest rates. 

Multifamily is particularly compelling as homeownership affordability challenges keep households renting for longer, while favorable supply/demand dynamics support the sector in many markets.

We are more cautious about data centers. While the sector is experiencing significant growth, we see meaningful binary risk associated with the long-term functionality of these assets. As credit investors, our priority is protecting the downside rather than capturing speculative growth.

What’s your competitive edge in deals today, and who are you competing against most often (banks or non-banks)?

Invesco’s competitive advantage is rooted in our property-first, credit-over-yield investment philosophy and our ability to leverage Invesco Real Estate’s broader equity and credit platform. We focus on originating loans to relationship-driven sponsors and lending against properties in markets where we have deep experience as real estate owners. 

Our equity colleagues are involved in evaluating transactions and providing additional expertise and discipline to our underwriting process. Traditional banks have significantly reduced their share of the commercial real estate lending market. While banks represented more than 60 percent of the market before the Global Financial Crisis, that share had fallen to approximately 34 percent in 2025. We believe the structural factors behind this decline will persist, creating continued opportunities for alternative lenders.

Do you expect more or fewer loan sales in the year ahead?

We are seeing a growing opportunity set in commercial real estate credit, but mostly in primary originations rather than loan sales driven in large part by the substantial wave of loan maturities underway.

With approximately $3.3 trillion in commercial real estate loans expected to mature over the current cycle, we anticipate continued demand for refinancing and recapitalization activity. 

At the same time, traditional banks have become a smaller part of the commercial real estate lending market, creating opportunities for alternative lenders to provide financing.

What is the most important thing you’ve done as a lender to protect your loan portfolio over the last year?

The most important thing we have done is maintain our commitment to disciplined underwriting, even as the opportunity set has expanded. Our investment philosophy is built around two fundamental principles: credit over yield, and property first. We prioritize high-quality real estate, experienced borrowers and conservative leverage rather than stretching for incremental returns. 

Across our lending platform, loan-to-value ratios have remained approximately 65 percent, reflecting our continued focus on conservative underwriting and downside protection following one of the largest commercial real estate valuation corrections in modern history. We have also continued to diversify our financing sources and optimize our balance sheet, including through CRE CLO issuance. This allows us to maintain greater control over our loans, improve our cost of capital and reduce financing risk while retaining the underlying assets in our portfolio.

Data centers: Are they as attractive a lending opportunity as they were two years ago?

We remain cautious about data centers as a lending opportunity, particularly given the significant growth and capital flowing into the sector. While data centers are benefiting from tremendous demand driven by AI and digital infrastructure investment, we believe the sector presents meaningful binary risk. Technology is evolving rapidly, and it is difficult to determine whether facilities being developed today will remain functionally relevant over the next 10 or 20 years. 

We continue to favor multifamily and industrial properties, where demand is more diversified and the long-term fundamentals are easier to underwrite.

Lightning Round:

Super Bowl or World Cup? World Series.

Best vacation you ever took? Provence.

Last time you said, “Phew, that was a close one!”? Every morning in L.A. traffic.

Book reader or phone scroller/email checker before bed? Novel reader.

Describe your portfolio in one word? Conservative.

Fitness activity of choice? Equinox.

Holiday wish? Family fun.