CMBS

The riskiest portion of the securitization, worth $65 million was wiped out earlier this month after the loan's sale left just $164 million to distribute to creditors.

The property is competitive, with overall sales of about $570 million in 2021, but the deal is short on upfront reserves to cover outstanding landlord obligations, like free/gap rent.

Portfolio managers should consider choosing CLOs and ABS over corporate credit and agency MBS over Treasuries in 2025, says asset manager Janus Henderson.

The pass-through certificates are supported by a full pool of amortizing loans, which have no interest-only periods.

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Tenants also have a high average credit quality, with 75.9% of them having at least an investment grade rating, and lease assets underlying the class A notes have a loan-to-value (LTV) ratio limited to 70%.

The multifamily property securities market is expected to stay resilient, despite weaknesses in certain markets due to cooling rent growth, higher vacancy, or oversupply.

Deal production has been a bright spot, but delinquencies could soon reach record highs, especially for office CMBS.

Despite shifts in work habits after COVID-19, the office building was 93.8% leased at the start of the month.