Arbor's Build-to-Rent CRE CLO Innovation

This report details Arbor Realty Trust's recent achievement in commercial real estate finance with the closing of an $802 million collateralized loan obligation (CLO) backed by build-to-rent (BTR) assets. It marks a significant milestone as the first CLO to allow loans with a vertical construction component, featuring BTR communities at various project stages. The report outlines the innovative structuring of this CLO in partnership with JPMorgan Chase, which required a rethinking of risk modeling and investor communication. The BTR sector is highlighted as a strong performer in the housing market, attracting institutional interest and providing a new liquidity path for development lending. The CLO is positioned as a strategic advantage for Arbor, combining direct lending expertise with capital markets execution. It is noted that Arbor has established itself as a leader in CLOs, having closed 24 in the past 21 years, and this latest transaction is seen as a transformative step in CRE finance, potentially influencing future market practices.