Banks Herald End of Extend-And-Pretend with Sales of Problem Loans

BISNOW reported that Banks are increasingly selling off distressed commercial real estate loans as the “extend-and-pretend” era ends, creating opportunities for private credit funds to acquire assets at discounted rates. The surge in private lending has reshaped the debt market, with firms using note purchases and restructurings to gain control of properties. As banks regain lending capacity, private lenders are adapting by offering more strategic, hands-on solutions to manage troubled assets. Key Takeaway: The shift from traditional bank lending to private credit is unlocking new pathways for investors to acquire real estate through distressed debt, signaling a fundamental transformation in how capital flows into commercial property markets.