Private-Label CMBS Issuance on Track to Top $100B This Year

Private-label CMBS has emerged as a bright spot in the lending environment. At its current pace, CMBS issuance may top $100 billion this year, according to a Colliers report by director of capital markets research, Aaron Jodka.

Issuance is on pace to top the 2013-2021 average of $84.2 billion in 2024 after posting the weakest year since 2011. Early indicators point to strong deal flow in October, with $12.6 billion in launched or pending deals. Single-borrower deals have been the most popular, accounting for 64% of volume through Q3, according to the report.

This momentum is a long way from the heyday of 2005-2007 when annual issuance reached $230.5 billion, but the market is well on its way to exceeding the average issuance following the Great Financial Crisis, said Jodka.

In the past several weeks, multiple notable single-borrower CMBS transactions have been announced.

This week, Ares Management Real Estate fund procured $475 million in financing backed by a 4.8 million-square-foot, 25-building industrial portfolio spanning 16 markets in 12 states. The floating-rate CMBS single-borrower financing was provided by a syndicate led by J.P. Morgan, with Morgan Stanley and Natixis Corporate & Investment Banking as joint bookrunners. The Cushman & Wakefield Equity, Debt and Structured Finance team, led by Rob Rubano, Gideon Gil, Brian Share, Joe Lieske, Ernesto Sanchez, and Lars Weston, served as the exclusive advisor.

“The SASB market continues to be one of the bright spots in debt capital markets in 2024, and this refinancing saw strong bond-buyer demand and competitive tightening spreads,” Share said.

Last week, real estate company Tishman Speyer and investment firm Henry Crown & Co. announced it is raising $3.4 billion through a single-borrower CMBS transaction secured by Rockefeller Center’s office and retail space. The securitization will be in the top five of such single-asset, single-borrower CMBS deals since 2014 and the largest after 2021. Previously, a securitization involving 560 hotel properties associated with Extended Stay America held that distinction. The CMBS sold for $4.65 billion.

Earlier this month, LBA Logistics said it is receiving CMBS single borrowing financing worth $577.63 million for its 25 industrial portfolio encompassing more than seven million square feet. JLL secured the loan for LBA through joint bookrunners headed by Bank of America, J.P. Morgan and Wells Fargo. The five-year term includes a floating rate and is inclusive of extensions, with the final pricing coming out to a Secured Overnight Financing Rate of 195 basis points.