Unusually for a debut transaction, the $329.7 million M360 2018-CRE1 will be actively managed: For the first 12 months after the closing date, funds from repaid principal can be used to purchase new loans, subject to eligibility criteria.
Nonbanks are originating more commercial mortgages on fixer-uppers in response to a sharp drop in the cost of funding in the securitization market. These deals are said to be "vastly different" than other CRE instruments that sustained big losses in the crisis — so far.
It’s not clear whether syndicated credit agreements require 100% investor consent before adopting a new benchmark. The industry trade group suggests giving new loans the flexibility to change indexes without unanimous approval, but investor advocates are balking.
So-called transitional lending has traditionally been kept on balance sheet; but it’s become attractive to bundle the loans for transactions called (take a deep breath) commercial real estate collateralized loan obligations. Can investors stomach the features these deals sported before the crisis?