ACRE Credit Fund II REIT's latest capital raise will sell $893 million in a collateralized loan obligation (CLO) from a pool of 20 multifamily mortgages, through issuer ACREC 2026-FL5.
With a June 2026 settlement, the deal has a 24-month reinvestment period and a stated maturity date of July 2043, according to Kroll Bond Rating Agency. The 36 individual assets break down into garden, low-rise and mid-rise apartments (90.6%), built-to-rent (6.4%) and one independent living complex, which accounts for 3.0% of the pool balance.
J.P. Morgan Securities is the deal's sole structuring agent, KBRA said, adding that Goldman Sachs,
The AAA-rated senior tranches, A and A-S, will issue the bulk of the notes, $757.6 million, KBRA said.
On a weighted average (WA) basis, the mortgages have an initial remaining life of 1.8 years, and a fully extended remaining loan term of 4.8 years, KBRA said.
The mortgages have an as-is loan-to-value (LTV) ratio of 70.1%, and a fully funded level of 70.9%, the rating agency said. Also on an as-is basis, the CLOs have a debt service coverage (DSC) of 0.64x, KBRA said.
All the loans are interest-only during both their initial and extension terms, KBRA said, but third-party secured overnight financing rate (SOFR) cap agreements provide interest rate protection. Those agreements have strike prices that range from 3.25% to 5.50%, with a weighted average (WA) of 4.25%.
Reinvestment assets, however, do not have a rate cap requirement, also loan modification features can he used to modify existing loan cap requirements, KBRA said.
Situs Asset Management is the primary servicer, while another entity, Situs Holdings, is on the deal as special servicer, KBRA said.
Outside of the class A notes, the B and C notes received ratings of AA- and A-, respectively; and the D, E, F and G notes received ratings of BBB, BB-, BB- and B, respectively.
