The chapter explores the differences between CRECLOs and CMBS deals, discussing how CRECLOs are favored for transitional properties while CMBS deals suit stabilized assets. It highlights the rising popularity of CRECLOs in 2021 and their attractiveness in the real estate financing landscape.
After the 2008 financial crisis, investment managers came up with a new securitized product: the collateralized loan obligation, or CLO, for commercial real estate. It was designed to correct some of the risks that came with its predecessor, the collateralized debt obligation.
But what exactly is the CRE CLO and how does it work? Deconstruct enlisted attorney and CLO expert Stewart McQueen at Dechert to break down the product.