PERE Credit
November 12, 2025 | Samantha Rowan
Alternative lenders are gearing up for a period of heavy succession planning.
One of the biggest stories in commercial real estate finance today is how private credit will step in to help refinance what the Mortgage Bankers Association estimates to be $1.3 trillion in loan maturities over the next two years.
But there is another story unfolding concurrently that is receiving much less attention. Nearly 60 percent of real estate industry leaders are slated to retire through the end of 2027, per a May report from Deloitte.
This expected transition is not unique to real estate private credit, but the impact on this part of the commercial real estate market will be more pronounced because of a relative paucity of debt specialists, says Kent Elliott, principal at San Francisco-based executive search firm RETS Associates.
“The vast majority of the clients that come to us want specialists. They’re not looking for a generalist who is going to have a one-year learning curve,” Elliott adds. “Our clients are looking for candidates that have a track record specific in the niche in which they’re looking to execute.”
Case study: BGO, Starwood
Two diversified real estate investment management firms, BGO and Starwood Capital Group, this year unveiled succession plans that aimed to position each firm for a generational transfer, according to reporting from affiliate title PERE.
At BGO, co-chief executives John Carrafiell and Sonny Kalsi in April named Toby Phelps as a co-president with Amy Price. Also in April, former Blackstone Real Estate Debt president Jonathan Pollack joined Starwood Capital Group as part of a succession plan for Barry Sternlicht.
While these succession plans were highly publicized and put into a place over several years, they are outliers, according to market participants who spoke to PERE Credit.
Most commercial real estate companies do not have succession plans in place. This is partly because succession plans can be difficult and expensive to execute, in part because of a prolonged period in which there is an overlap between senior executives, Elliott adds.
“One of our clients sees a succession plan as protection, with the understanding that there is protection in the event of an unexpected departure. You need to have that right person in place to replace that individual,” he notes. “There needs to be some overlap so that the intellectual capital can be passed onto a new person, with a minimum of three to six months for this to work effectively.”
Outlook
This generational shift is happening at a time in which demand is rising for stable, income-producing assets, and banks are pulling back from commercial real estate lending. This means there is an expected generational shift in capital deployment strategies, with investment managers expected to focus increasingly on real estate lending, Eliott says.
The NYU Schack Institute of Real Estate is working with the rising generation to provide a broader view of what working in commercial real estate can be, according to Marc Norman, associate dean.
“A student might just say they want to work in acquisitions because they don’t necessarily know of all the dimensions, including distressed debt or private credit,” Norman adds. “One job we have is to educate them on the breadth of the industry and what the opportunities are for new entrants.”
One thing that is unique to the school’s program is to emphasize the collaborative, problem-solving aspects of the sector. “We teach them that they need a group to come together to solve issues like building affordable housing or using research to look at the ways in which people live and how to bring together developers, investors and lenders for projects.”
