Mid-market credit unions are making their move in commercial real estate (CRE). Armed with $100 million to $1 billion in assets, these institutions have enough capital to make meaningful investments while staying nimble enough to act quickly on opportunities. The result? A strategic shift toward CRE that’s generating impressive returns and delivering real value to members.
The Numbers Tell The Story
The commercial real estate market momentum is creating opportunities for credit unions:
- $498 billion in total commercial real estate mortgage borrowing and lending in 2024, representing a 16% increase from $429 billion in 2023, according to the Mortgage Bankers Association.
- $411 billion in loans closed by dedicated commercial mortgage bankers in 2024, a 34% increase from $306 billion in 2023, according to MBA data.
- Strong multifamily activity driving much of the lending rebound, with this sector showing particular strength.
- Record $1.66 trillion in total credit union loans outstanding as of December 2024, up 8% year-over-year, according to the California Credit Union League, providing the capital base for CRE expansion.
According to CBRE, industry analysts project up to 10% growth in commercial real estate investment activity in 2025, driven by greater confidence in the economy and improved rates of return on property investment.
The timing couldn’t be better. After the most significant CRE downturn since the global financial crisis, interest rates are stabilizing and market fundamentals are improving. Industry experts describe this as a “once-in-a-generation opportunity,” a chance for institutions to strategically position themselves as the market recovers.
The Investment Playbook
Mid-market credit unions are pursuing three main strategies:
Direct ownership — Buying branch properties instead of leasing, investing in mixed-use developments, or acquiring community assets like medical buildings and retail centers.
Portfolio expansion — Growing commercial and multifamily loan books as demand rebounds and borrowers return to the market.
Strategic partnerships — Joining real estate-focused CUSOs and regional investment pools to access larger deals and share expertise.
The goal is consistent across all approaches: generate steady income, build long-term equity, and reinvest gains into better member rates and services.
The Hidden Complexity: Where Deals Slow Down
But here’s what many credit unions discover after diving into CRE: The operational demands are intense.
Documentation Bottlenecks
Commercial real estate deals generate paperwork at every turn. Appraisers, attorneys, brokers, regulators, and tenants all contribute documents that must be collected, verified, and stored. Industry research reveals that waiting for documentation consumes 40% of the commercial lending sales cycle time. Meanwhile, loan officers spend 30% to 40% of their working hours on manual data entry tasks.
Regulatory Complexity
NCUA oversight of CRE investments continues tightening. Credit unions need comprehensive risk management frameworks and specialized compliance expertise that many smaller institutions lack.
Market Analysis Demands
Effective CRE investing requires sophisticated due diligence, market timing expertise, and property valuation skills that differ significantly from consumer lending.
For lean teams at mid-market credit unions, these challenges create three critical problems:
- Deal delays — Opportunities stall while staff chase signatures and missing files.
- Compliance risks — Regulatory scrutiny demands auditable workflows and documentation.
- Resource drain — Administrative tasks steal time from market analysis and member service.
Smart Solutions, Competitive Advantages
The credit unions winning in CRE have learned something important: Operational challenges are actually opportunities in disguise. Address them effectively and you gain a competitive edge.
Forward-thinking institutions are taking varied approaches:
Process standardization creates repeatable workflows that reduce errors and speed execution.
Staff specialization builds internal CRE expertise or establishes partnerships with external experts.
Technology automation eliminates administrative bottlenecks, particularly in document management.
The technology approach is showing dramatic results. Automated document collection platforms like FileInvite, with secure portals, automatic reminders, and audit trails, are cutting turnaround times significantly. Organizations using FileInvite report reductions in time-to-close above 60%.
These platforms enable teams to:
- Centralize document collection securely.
- Maintain NCUA-compliant audit trails.
- Accelerate closings and improve client experience.
- Focus staff time on deal analysis and member service.
The Bottom Line
Commercial real estate offers mid-market credit unions a clear growth path in 2025 and beyond. Market conditions are improving, rates are normalizing, and opportunities are emerging for institutions ready to act.
But success requires more than capital. It demands operational excellence. Credit unions that can execute deals efficiently through better processes, expertise, or technology will capture the best opportunities and build sustainable competitive advantages.
The winners in this cycle will be the institutions that recognized early. In CRE investing, how fast you can move matters as much as how much you can invest. For mid-market credit unions ready to embrace operational efficiency, the timing couldn’t be better to build member-serving CRE portfolios that drive long-term growth.
SOURCES:
Mortgage Bankers Association. “Total Commercial Real Estate Borrowing and Lending Increased 16 Percent in 2024.” Press Release, April 24, 2025.
California Credit Union League and Nevada’s Credit Unions. “Glimpse Into 2025 as Latest CU Trends and Data are Released.” February 21, 2025.
CBRE. “CBRE’s 2025 US Real Estate Outlook: Investment Recovery to Gain Momentum Despite Interest Rates Remaining Higher For Longer.” 2025.
FileInvite. “How Can FileInvite Solve 4 of the Greatest Challenges in the Commercial Lending Industry?” August 9, 2024.
Hines. “Will 2025 be a pivotal year of recovery for commercial real estate?” World Economic Forum, 2025.
Deloitte. “2025 commercial real estate outlook.” Deloitte Insights, June 11, 2025.
FileInvite. “How Fundera used FileInvite to slash loan document processing.” June 9, 2025.
FileInvite. “From Friction to Flow: How Credit Unions Use AI to Accelerate Lending Without Sacrificing Member Relationships.” July 1, 2025.
