- Schroders has fully written off its 20% stake in A10 Capital, a US commercial real estate (CRE) lender it backed in 2018, as revealed in its half-year earnings on July 31.
- The writedown reflects broader pressures in the CRE market, with rising interest rates, declining valuations, and weak tenant demand pushing distress levels up by 23% year-over-year.
- The move is part of a global restructuring at Schroders, which also included exits from real estate operations in Munich and private credit in Australia, resulting in £56M ($74.5M) in charges.
Investment Gone South
Schroders acquired its minority stake in Idaho-based A10 Capital seven years ago. Other high-profile investors in the lender include BlackRock, Gemspring Capital, and H.I.G. Capital. The firm has now fully written off that investment as part of its mid-year financial disclosures, without naming A10 explicitly, reports Bloomberg.
Though the exact reason for the writedown wasn’t disclosed, it aligns with growing distress across the CRE debt market. Office-backed loans—a key area of A10’s lending activity—have been especially affected.
CRE Market Turmoil
Founded in 2007, A10 Capital has originated over $5.6B in bridge and permanent loans across 40 US states. About one-third of its deals were in the office sector—one of the hardest-hit segments in the current CRE downturn.
According to MSCI Real Assets, total CRE distress in the US stood at over $116B by the end of Q1 2025, a 23% increase year-over-year. Offices alone now account for nearly half of that total, reflecting the sector’s vulnerability amid persistently high vacancies and shrinking demand.
Get Smarter about what matters in CRE
Stay ahead of trends in commercial real estate with CRE Daily – the free newsletter delivering everything you need to start your day in just 5-minutes
Industry-Wide Retrenchment
Schroders’ exit from A10 follows a broader trend of European lenders stepping back from the US market. Deutsche Pfandbriefbank AG, a German property lender, recently announced it would wind down its $4.5B US CRE portfolio.
Schroders’ restructuring included not only the A10 writedown but also the shutdown of operations in Munich and Australia. The moves signal a shift in global strategy in response to sector-wide challenges.
Why It Matters
The decision underscores the growing challenges facing private credit and CRE lenders with significant exposure to office assets. As higher rates and economic uncertainty weigh on asset values, institutional investors are beginning to reassess risk—and reposition accordingly.
Expect more shake-ups in the private credit and CRE lending space as firms reckon with a shifting landscape and declining asset performance.
What’s Next
Industry observers are closely watching for further consolidations, writedowns, and potential defaults in the CRE debt space. With distress on the rise and rates expected to stay elevated, lenders and investors alike may continue pulling back, particularly from office-heavy portfolios.
