Single-Asset Deals Remain Popular In CMBS Market
International Financing Review reports “single-asset and single-borrower CMBS deals are accounting for a high proportion of activity in the market, as conduit refinancing slows and lenders face competition for assets.” Investors note that they often prefer single asset over multi-borrower deals due to their simplicity, making them easier to underwrite. Voya Investment Management Head of Securitized Credit Dave Goodson said, “Single-asset deals are so much easier to underwrite – it’s one borrower, or one property, and it’s so much easier to get your head around that. Relative to conduit, you’re usually willing to accept less spread, because you can understand the risk more easily. It’s often something closer to a trophy asset, or otherwise more vanilla, so it’s become a more efficient funding model and it’s often easier for the street to sell deals.”