Small-Balance Lending Surges With Blackstone Harvest Deal

Blackstone Credit & Insurance has partnered with Harvest Commercial Capital to launch a $1B loan acquisition program focused on small-business commercial real estate.
The deal provides Blackstone with a steady pipeline of SBA-backed loans, while giving Harvest permanent capital to increase lending.
Investor demand for small-balance CRE debt is growing, as traditional financing sources remain tight.

Key Takeaways

Expanding the Playbook

According to CoStar, Blackstone is pushing deeper into real estate credit through a $1B partnership with Harvest Commercial Capital. Under the agreement, Blackstone Credit & Insurance will acquire loans originated by Harvest on an ongoing basis.

These loans are typically backed by the Small Business Administration and secured by commercial real estate. As a result, they offer a stable income stream and lower risk compared to traditional commercial mortgages.

Moreover, the partnership gives Blackstone access to a segment of the market that has remained resilient—owner-occupied properties financed by small businesses.

Inside the Portfolio

Since launching in 2016, Harvest has originated more than $1B in loans. It specializes in helping small businesses purchase the properties they operate from.

In recent years, Harvest has also packaged many of those loans into securitized offerings. Its most recent securitization, completed in 2025, totaled $264.6M.

According to Morningstar DBRS, Harvest’s current loan portfolio is diversified across asset types:

50% Industrial
18% Office
15% Retail

In terms of geography, California makes up half of the portfolio. Florida and Texas follow as the next largest markets.

Strategic Upside

For Blackstone, this deal creates a reliable flow of small-balance commercial loans backed by hard assets. These loans also tend to have strong borrower profiles, since owners are operating their businesses from the properties they finance.

Meanwhile, Harvest benefits from permanent capital that expands its lending capacity. Importantly, the firm will continue to operate independently, while gaining access to Blackstone’s vast insurance capital base.

Consequently, the partnership offers strategic value to both parties. Blackstone gains exposure to stable, granular real estate credit. Harvest secures growth capital without giving up control. The deal also adds to Blackstone’s broader $1B in financing activity this year across various sectors, highlighting its ongoing push into structured real estate lending.

Market Context

The timing of the deal is significant. As credit conditions tighten across the commercial real estate sector, institutional investors are increasingly drawn to safer debt segments.

While large office and retail loans remain under stress, small-balance, owner-occupied properties are performing more consistently. Many investors view these loans as less speculative and more closely tied to business fundamentals.

Therefore, the Blackstone-Harvest partnership reflects a broader shift. Capital is flowing toward more conservative, asset-backed lending strategies with long-term upside.

Looking ahead, more firms may follow Blackstone’s lead — tapping into a niche but growing corner of the CRE debt market.