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Floating-Rate Comprising Majority of SASB and Freddie CMBS Issuance in 2021
5/24/2021 · by CRE Finance Council · CMBS Performance Metrics · Legislation and Regulation
Despite the low rates offered today on fixed-rate CMBS loans, owners of struggling commercial real estate assets, particularly retail and hotel, are turning to floating-rate CMBS debt – such as single-asset/single-borrower (SASB) CMB and CRE CLOs -- for the flexibility it provides. Many borrowers with troubled assets like retail and hotel are seeking to stabilize their properties via a floating-rate loan with the goal of refinancing into a longer-term fixed-rate loan when property values have stabilized/increased and fixed-rate loan proceeds will be higher. The result is that the level of floating-rate CMBS issuance is at its highest since the global financial crisis (GFC).