While B-piece buyers have typically found it difficult to get comfortable with all of the subordinate pieces in some CMBS pools, the recent spate of large floating-rate CMBS transactions containing sizeable assets with sub tranches that are not cross-collateralized has made this collateral more palatable to investors, sources say.

Traditionally, it has been harder to sell the bottoms of a floating-rate deal because they have always been transitional properties. However, when sub tranches are treated as specific, individual classes rather than as part of a pool, or if they are not cross-collateralized, it is easier to sell subordinate classes to B-piece buyers who would rather buy specific loans in a pool, leading to better execution on those tranches.

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