Issuance of private-label commercial mortgage-backed securities (CMBS) fell by 41% to $22 billion in the second quarter from $37.55 billion in first-quarter volume. However, new data from Trepp Inc. determined the issuance during the first half of the year totaled $59.55 billion, a 35% increase from the same period in 2024 and the largest volume in more than 15 years.
Trepp noted that single-asset, single-borrower deals (SASB) accounted for nearly three-quarters of the issuance in the year’s first half, with eight deals encompassing more than $1 billion each; the average level for those deals was averaged $758 million. Nine SASB deals totaling $11.17 billion involved Blackstone collateral, which accounted for 19% of the period’s total issuance.
“Issuance typically increases as bond spreads tighten, and that’s what has been happening,” observed Orest Mandzy, managing editor at Trepp. “At the start of the year, benchmark CMBS conduit bonds on new deals were hovering around the 80 basis-point mark. They widened a bit as supply increased and blew out somewhat to nearly 110 basis points more than the J-curve when the Trump administration announced reciprocal tariffs on the US’s trading partners in early April. That put a chill on the market, but it was relatively short-lived. After a roughly two-week break in conduit issuance, spreads tightened to the mid- to low-90s.”
Trepp reported that Wells Fargo Securities was the most active bookrunner during this period, with 14.53 deals totaling $10.73 billion – this encompassed 18% of the total private-label market. Citigroup generated 10 deals totaling $7.9 billion and Goldman Sachs produced 9.67 deals totaling $7.03 billion – the top three companies in this sector held 43% of the overall market.
