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$449M bridge-loan pool marks first CMBS of the new year

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Bridge REIT LLC is sponsoring a $449.6 million bridge-loan securitization backed mostly by transitional multifamily properties.

According to a presale report from DBRS Morningstar, the BDS 2020-FL5 transaction is a two-year reinvestable portfolio of 24 commercial loans secured by 26 real estate properties, with balances totaling $492.2 million. The proceeds raised from the note sale will be used in part to acquire an additional $57.8 million in ramp-up loans by the sponsor, bringing the targeted collateral size of the pool to $550 million.

DBRS Morningstar has assigned preliminary AAA ratings to the $314.88 million Class A notes in the deal, which is being structured by Wells Fargo. Wells is also the lead placement agent alongside Barclays and JPMorgan.

DBRS Morningstar reports that 77% of the portfolio properties are multifamily apartment properties, which also includes the largest loan in the portfolio: a $43.96 million loan for Cobalt Springs, an apartment complex in Taylors, S.C.

The pool also includes a concentration of office properties (11.9% of the collateral balance) and hospitality properties (7.7%).

While many of the properties are undergoing renovations, they are still generating cash flows. Cobalt Springs, for example, is more than 93% occupied as certain units are being upgraded and remodeled.

The transaction is the first publicly rated commercial mortgage-backed securitization of the year. Last year, banks arranged approximately $41.3 billion in conduit CMBS market transactions across 50 rated deals, according to Finsight.

Late Tuesday, Moody's Investors Service issued a provisional AAA rating on the Class A notes. (Moody's classified the transaction as a commercial real estate CLO.)

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CMBS Multifamily Wells Fargo
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