{"id":1004802118,"date":"2026-06-17T09:20:11","date_gmt":"2026-06-17T17:20:11","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004802118"},"modified":"2026-06-17T11:52:09","modified_gmt":"2026-06-17T19:52:09","slug":"can-the-cre-clo-continue-its-run","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/can-the-cre-clo-continue-its-run\/","title":{"rendered":"Can CRE CLO Continue Its Run?"},"content":{"rendered":"
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Image by procreation\/Adobe Stock<\/figcaption><\/figure><\/div>\n\n\n

Total Collateralized Loan Obligation issuance surged in the the first quarter of 2026, with new loan and refinancing activity totaling $103.3 billion across 236 deals. But predictions on whether or not this will continue through the year depend on who you ask.<\/p>\n\n\n\n

Trepp data confirms the upward spiral. As of June, it found CRE CLO issuance was just over $24 billion across 24 deals, up roughly 39 percent over the same period last year, Dr. Stephen Buschbom, Trepp\u2019s head of applied research and analytics told Commercial Property Executive. However, he noted, the run rate for 2026 is slower than 2025, even as AAA spreads declined.\u201d<\/p>\n\n\n\n

Single-Asset Single-Borrower CMBS<\/a> was also robust in Q1 2026, with issuance totaling $32.74 billion and marking the second busiest first quarter since just before the Global Financial Crisis, according to a Trepp report<\/a>. The volume, though, represented a 12.8 percent reduction from last year’s first quarter, which was the busiest post-GFC start.<\/p>\n\n\n\n

CLOs vs. SASBs<\/strong><\/strong><\/h2>\n\n\n\n

Buschbom drew a distinction between CRE CLOs and CMBS SASB debt, noting that CLOs are a structured finance product backed by a 150 to 300-plus diversified pool of below-investment-grade corporate loans sold to Special Purpose Vehicles that sell structured, tiered debt and equity tranches on the stock market. SASBs, meanwhile, involve a single, large loan of $200 million or more secured by one trophy asset or a portfolio of properties owned by the same borrower and traded on the secondary bond market among institutional investors.<\/p>\n\n\n\n

\u201cThe driver is not corporate M&A or restructuring but rather the continued need to finance transitional commercial real estate,\u201d Buschbom continued. \u201cCRE CLOs are particularly useful for bridge loans, value-add business plans, lease-up strategies and borrowers that need future-funding capacity for renovations or repositioning.\u201d<\/p>\n\n\n

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The driver is not corporate M&A or restructuring but rather the continued need to finance transitional commercial real estate,\u201d Dr. Stephen Buschbom, repp\u2019s head of applied research and analytics.<\/figcaption><\/figure><\/div>\n\n\n

Multifamily remains the dominant collateral type for CLOs. So far in 2026, Trepp data shows multifamily represents about 70.5 percent of CRE CLO collateral, followed by industrial at 10 percent, lodging at 4.8 percent, office at 2.1 percent and retail at 1.5 percent.<\/p>\n\n\n\n

\u201cThat said, I would not describe today\u2019s CRE CLO market as a simple repeat of the 2021 boom,\u201d Buschbom added. In 2021, issuance was fueled by extremely low interest rates and abundant liquidity. <\/p>\n\n\n\n

Today\u2019s market is operating in a much higher-rate environment, and the better deals tend to involve more conservative underwriting, realistic rent-growth assumptions and sponsors with credible plans to improve property income:. \u201cIf spreads remain stable and refinancing demand stays elevated, CRE CLO issuance can remain active through the year, but volatility in rates, credit spreads or property-level performance could slow the pace.\u201d<\/p>\n\n\n\n

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CPE Capital Markets Newsletter<\/h2>\n\n\n\n

Executive Editor Therese Fitzgerald delivers the capital markets intel that moves the needle.<\/p>\n<\/div><\/div>\n<\/div><\/div>\n\n\n\n

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