Benefit Street Partners REIT Franklin BSP Realty Trust Closes $1B CRE CLO – Commercial Observer

Benefit Street PartnersNew York-based private credit fund has closed a $1 billion CLO offering sponsored by a real estate investment trust (REIT), Franklin BSP Real Estate Fund.

BSPRT 2024-FL11 (FL11) is a $1.024 billion CLO that has a 36-month reinvestment period and includes $100 million set aside for a 180-day “grow” period for multifamily acquisitions. The security features an initial down payment rate of 86.5 percent and an average Secured Overnight Financing Rate (SOFR) +1.99 percent.

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As of Friday, SOFR is currently 4.84%.

Michael Comparatopresident of Franklin BSP Realty Trust, said in a statement that his REIT is “very active” in middle market lending and that many of them are included in the FL11 collateral pool.

“Strong investor interest has led to significant oversubscription of all bond classes and we are very grateful for the continued support of our offerings by some of the largest institutional investors in the world,” Comparato said.

He managed the structure Barclays Capitalone sec JP Morgan Securities AND Wells Fargo Securities they worked together as co-managers and co-bookrunners at CLO.

CLOs securitize a pool of CRE assets, are typically unstabilized, and are financed with variable-rate debt. A CLO creates its bonds as investment grade (or higher) assets with protections for investors, particularly the CLO originator, which remains the holder of the control grade bonds and actively manages the securities. The originator can choose which assets should remain in the CLO up to a certain point, exchanging non-performing assets for performing assets to reduce credit risk for itself and its investors.

Last year, CRE CLO issuance dropped from $28.9 billion in September 2022 to $4.8 billion by September 2023, an 83 percent decline, according to CREFC.

Brian Pascus can be contacted at: [email protected]