Non-Agency CMBS and CRE CLO Issuance kick-off 2025 strong

Non-Agency CMBS Market Overview

The U.S. non-agency CMBS market came out of the gate strong in January 2025 with roughly $8 billion in new issuance coming to market spread across 8 deals. This figure represents 44% more than the first month of 2024 and bodes well for the year to come as investor appetite remains strong.

Source: Commercial Mortgage Alert, Morningstar Credit

Non-Agency CMBS Issuance was once again dominated by  Single Asset Single Borrower (SASB) with 6 deals totaling just over $6 billion for January. Leading the way for the SASB deals was the securitization of $2.65 billion of debt for The Spiral office tower which has 2.8 million square feet in the Hudson Yards neighborhood of New York City highlighting that there is strong demand for high quality trophy office space. The second largest SASB deal was to refinance existing debt for the Houston Galleria Mall with a total balance of $1.2 billion showcasing similar demand for well positioned high end super-regional malls.

CRE CLO Issuance makes a comeback

After a down couple of years CRE CLO issuance roared out of the gate in January with over $5.4 billion in issuance for the month. This represents more than 63.5% of total issuance for the full year in 2024 and is almost equal to 2023’s total volume.

January CRE CLO issuance totals were spread across 5 deals all of which were managed pools continuing recent trends as the last 8 deals issued were this type.

Source: Commercial Mortgage Alert, Morningstar Credit

This strong start to the year reinforces what many market prognosticators felt as they predicted a rebound for this CRE CLOs in 2025.

The strong start to 2025 for Non-Agency CMBS and CRE CLOs serve as a solid foundation for the primary issuance markets this year. The forward looking pipeline for the remainder of the first quarter is robust and market participants are feeling optimistic that 2025 will be a huge step forward for CRE securitization.