Trepp | Q1 2026 CMBS Issuance Stays Solid, Despite Year-over-Year Drop

A total of 42 domestic, private-label commercial mortgage-backed securities (CMBS) deals with a balance of $32.74 billion were issued during the first quarter, marking the second busiest first quarter since just before the Global Financial Crisis (GFC). The volume, however, represented a 12.8% reduction from last year, which itself was the busiest post-GFC first quarter.

SASB Deals Driving Issuance

As has increasingly been the case, issuance of single-asset, single-borrower (SASB) deals dominated, accounting for nearly three-quarters (32 deals) of the period’s issuance, or $24.54 billion of the total. SASB deals have become the source of choice for very large loans, which previously were the purview of clubs or syndicates of insurance companies. The CMBS market is said to provide a greater certainty of execution and the ability to fund extremely large loans relatively efficiently.

Six of the quarter’s SASB deals weighed in at more than $1 billion each, with one breaking the scale at $3.05 billion.

The CMBS market has been buoyed by stable bond spreads. Market stability benefits lenders who rely on securitization as an exit strategy, as it makes them more comfortable in pricing their loans.

Spreads for benchmark bonds, those with the longest average lives and highest possible ratings, ranged from 67 basis points more than the J-curve to 88 basis points more than the curve, with most deals printing in the 70-basis-point ballpark. The deals priced in March were swept up in the modest yet broader spread widening resulting from the Iran war.

Meanwhile, 16 CRE collateralized loan obligations with a balance of $14.5 billion were issued during the quarter. That was up 76% from the same time a year ago.

Office Optimism

CMBS lenders also appear to be getting more comfortable writing loans against office properties. The 10 conduit deals that were priced during the quarter had an 18.70% exposure to the office sector. That was up from the 16.32% concentration during the same period a year ago and the 15.75% concentration for the 44 conduits that were issued all of last year.

But the concentration of apartment loans has shrunk sharply, to 14% from the 21.1% concentration a year ago and the full-year concentration of 23.25%. If you add SASB deals to the mix, the office concentration declined to 21.66% in the latest quarter from 23.02% a year ago. Hotel loans had the largest share of the SASB market, thanks to a pair of outsized deals.

Underwritten credit metrics in the conduit market improved during the latest quarter, possibly the result of the greater proportion of office loans, which typically are underwritten more conservatively than other loans. The average loan-to-value ratio for the 10 conduit deals that priced during the latest quarter was 57.6%, up from 57.1% a year ago. Debt-service coverage ratios increased to 1.99x from 1.76x, and debt yields climbed to 13.3% from 12.5%.

Compliments of Trepp LLC– a Premium Member of the EACCNY