Excess Spread - a new dawn for CRE finance, do we need NoChu back, even more BNPLs
- Owen Sanderson
A new dawn for CRE finance?
The idea around here is not to do pure deal coverage — except when there’s something pretty special out there, and this week there very much is — Europe’s first Commercial Real Estate (CRE) CLO since 2008, potentially heralding a big step forward in CRE capital markets financing and mid-market CRE lending.
Most CMBS in Europe these days is pretty uninspirational stuff — vanilla assets with low LTVs, often (but not always) sponsored by Blackstone. Last year was admittedly a particular low, but the giant PE shop’s buildout of its Mileway logistics platform was pretty much the only thing keeping the market on life support, instead of totally dead.
But Starz Mortgage Capital 2021-1, which Credit Suisse has been marketing this week, is a different beast entirely. It’s a CRE CLO, the first seen in Europe since before 2008 (though it’s a vast market in the US), and could herald the emergence of an increasingly important new asset class (some five or six other deals are said to be ramping).