BrightSpire to Close $955M CRE CLO
Nearly all debt encumbers multifamily properties.
BrightSpire Capital Operating Co. will close a commercial real estate collateral loan obligation amounting to $955 million, according to a KBRA report. Nearly the entire collateral (95 percent of notes) is backed by multifamily properties spread across 11 states.
Some of the top multifamily lenders will serve as placement agents, including Wells Fargo, Morgan Stanley, Citigroup and Barclays. Wilmington Trust will serve as trustee.
The deal includes 29 interest-only loans, out of which 17 pari passu participations and 12 whole notes totaling $856.7 million. The financing also includes $98.3 million of cash collateral. The largest 10 loans make up 52.5 percent of the collateral, below the 61.9 percent average registered by KBRA.
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Affiliates of BrightSpire originated the debt, with an average current interest rate of 6.33 percent, between 2019 and 2026. The purpose of debt deployment was nearly equally divided between refinancing deals (51.2 percent) and acquisitions (48.8 percent).
The residential properties include 15 garden-style, five mid-rise, four low-rise and three high-rise buildings, as well as two townhouse communities. The majority of the debt pool faces secondary market exposure (55.7 percent), with the remaining 39.9 percent located in primary markets and 4.4 percent in tertiary markets.
The largest share of the debt (20.9 percent) pertains to California communities, followed by those located in Arizona (19.7 percent), Texas (18.5 percent), Alabama (8.5 percent) and Tennessee (6.7 percent). Other states include New Jersey, Missouri, New York, Nevada and Minnesota.
By metro, Phoenix (15.2 percent of the debt pool) surpassed Los Angeles (13.2 percent) and New York City (11.3 percent). Dallas-Fort Worth (7.2 percent) and Huntsville, Ala. (6.9 percent) round out the top five. The remaining markets are Nashville, Tenn., St. Louis, the Inland Empire, Calif., Tucson, Ariz., and Austin, Texas.
A glimpse at the multifamily properties
At a property level, The Lilian, a 100-unit property in Los Angeles, backs the largest share of the debt, $70.8 million. Rockpoint, Silverpeak and Harridge secured this loan to refinance the community that debuted last year.
Other notes belonging to the underlying debt pool include the $53 million refinancing loan secured by Hillcrest for Terra at the Grove, a 307-unit property in St. Louis, and the $42.3 million note obtained by Tailwind Investment Group and Roxborough Group to refinance Sixteen60, a 197-unit community in San Bernardino, Calif.
Multifamily boosts CRE CLO issuance in 2025
CRE CLO issuance clocked in at $30.6 billion throughout the U.S. last year, more than doubling the 2024 volume, according to the latest Trepp report. This was the best year since 2021’s peak of $44.2 billion.
Multifamily dominated 2025’s share of CRE CLO issuance at 70.3 percent, the same source shows. For reference, the sector made up 62.0 percent in 2021. The overall median note rate at issuance was 6.00 percent in 2025, up from 4.11 in 2021. BrightSpire’s average rate is 33 basis points higher than the 2025 median.
One of the contributors to 2025’s CLO volume was Argentic Investment Management. Late last year, the company secured a $951.6 million deal backed by 23 loans encumbering 53 properties, out of which more than 60 percent belonged to the multifamily sector.
