Media Coverage

CLOs Make Inroads in CRE Capital Markets

May 27, 2021

CLOs and commercial mortgage-backed securities have been in use for years as forms of non-recourse financing. Each creates a bond-like financial instrument, with investors paying money for return of principal and interest from the cash flow of payments

With CLOs, commercial real estate borrowers can get a cheaper rate because it can be laid off to the investors,” says Brett Forman, eastern US executive managing director for private lender Trez
Capital. “The thesis is that the CLO buys time to improve the quality of the real estate until a permanent takeout loan can be obtained. Investors are clamoring for yield because we are in a yield-starved environment, so CLOs are increasingly appealing.”

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