RAIT Partnership is marketing z $349 million commercial real estate collateralized loan obligation, according to Moody's Investors Service.
It follows on the heels of New York based lender and investor NorthStar Realty Finance, which last week began marketing a pool of CRE loans that totaled $613 million.
The 31 loans in the collateral pool backing RAIT 2015-FL5 are secured by so-called transition properties. These are properties are currently assessed as below investment grade but the sponsor has plans to stabilize and improve the asset value. Moody's rates the assets an equivalent 'Caa1'.
The pool is highly leveraged and the loans have a weighted average loan to value ratio, as calculated by Moody's, of 123%. Higher leverage exposes the pool to greater risk of default and higher overall loss severity should a default occur.
Trimont Real Estate Advisors, LLC will act as operating advisor, and RAIT, which originated all of the loans, will act as primary and special servicer for this transaction.
The portfolio is fully ramped but the structure has a two-year acquisition period during which the sponsor may purchase related future funding companion participations using proceeds from certain principal prepayments and repayments.
Three loans; Desert Marketplace, Vista Shops, and Oyster Point Square, representing 9.9% of the portfolio, have not yet closed. If the loans do not close within 90 days of the transaction closing date, the unused proceeds reserved against the loans will be used to amortize the notes.
Moody's assigned a preliminary 'Aaa' ratings to the class A notes that benefit from 44.25% subordination.