There's long been a question, according to Yardi Matrix, about whether high-yield commercial mortgages get priced in line with the risk investors face. The problem has been data—or, rather, the lack of it. "Originators and holders of subordinated debt tend to be private operators that keep a tight lid on information for fear of giving away trade secrets," Yardi noted.

But a new analysis from Michael Giliberto—a cofounder of the Giliberto-Levy mortgage indexes—in the Journal of Portfolio Management reported that "high-yield debt produced a return of 8.5% during the 2010s decade, more than senior instruments such as senior fixed-rate debt (5.5%) and CMBS (5.9%) and less than equity indexes produced by the National Council of Real Estate Fiduciaries: the ODCE fund index (10.5%) and NCREIF Property Index (9.4%)," according to Yardi.

According to the article's abstract, the analysis used a "multimanager sample of loan-level data to assess the performance of commercial real estate (CRE) subordinate debt from 2010 through 2020." Giliberto compared that data to "various real estate alternatives, including senior mortgage loans and real estate equity." A sample of the loans became a data set to examine the risk-return trade-offs. The sample comprised 408 loans