Single-Asset, Single-Borrower CMBS Loans Are Growing In Popularity
While the average CMBS, or commercial mortgage backed security, often consists of a pool of 50-100 loans, single-asset, single-borrower (SASB) conduit loans consist of one, large loan for a single property that is securitized and sold on the secondary market. These SASB loans are becoming an increasingly popular form of financing for the largest and most exclusive commercial properties.
For example, in July 2018, Brookfield Management Group received a $1.2 billion SASB CMBS loan from conduit lenders Citibank and Goldman Sachs to refinance the iconic Bahamas-based Atlantis Resort and Casino. And, a few months earlier, in April 2018, Blackstone Group Real Estate Partners received a $382 million CMBS SASB loan from Morgan Stanley and Wells Fargo.
In the first quarter of 2018, CMBS SASB loan volume increased nearly 230% over the first quarter of 2017, meaning that these loans are an increasingly popular product for both borrowers and CMBS investors alike. However, in order to qualify, properties must typically be worth in the hundreds of millions, be owned by highly reputable borrowers, and be located in ultra high-end markets.