Rating agency KBRA just came out with a look at securitization credit performance in commercial real estate in the wake of the pandemic. The news? "CRE securitization credit performance among conduit, single borrower/large loan (SB/LL), and CRE collateralized loan obligation (CLO) transactions has held up reasonably well," the report noted. "That is not to say that there were no major challenges along the way, but lessons learned from the GFC [global financial crisis] helped to mitigate the credit impact of COVID."

Not letting the perfect become the enemy of the good, the ability of changes since the GFC to manage challenges is terrific news. A major trigger of the global financial crisis was securitization. Complex derivative vehicles that were supposed to free capital for investment became ticking financial bombs.

Even before the dust finally settled—that took at least ten years and still not everyone fully recovered—major changes in regulations and business practices reset how financing would happen. As KBRA suggests, the alterations to reduce risk seem to have worked.