Investment Opportunities in Private Commercial Mortgage Investments

Investment Opportunities
in Private Commercial
Mortgage Investments

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William Pattison Michael Steinberg Derek Tong Jacob Kurosaki
OCT 11, 2022

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At approximately $5.2 trillion, just over half the size of the U.S. corporate bond market, the U.S. commercial mortgage market is home to a variety of attractive investment opportunities.1 Commercial banks and life insurance companies hold the majority of U.S. private commercial mortgages. In the past, the substantial organizational infrastructure required to access and underwrite them has limited institutional investors’ ability to invest in this asset class. Today, new commercial mortgage investment vehicles are emerging every year, and the asset class is becoming more accessible to a broader range of investors. Also, as financial institutions become more familiar with the asset class, more options for leveraging commercial mortgage loan (CML) investments are becoming available. We believe this increased accessibility and familiarity has emerged at an opportune time, as many institutional investors, from public and private pension funds to foundations and endowments, remain under-allocated to the sector and are seeking income-oriented strategies.