NEW YORK CITY–Earlier this Spring Kroll Bond Rating Agencyassigned preliminary ratings to a CRE collateralized loanobligation that LoanCore Capital Markets was taking to themarket. It was backed by an eye-popping $1.1 billion in firstmortgages secured by a mix of 33 properties consisting ofmultifamily, office, mixed-use, industrial, hospitality and retailassets. For the two or so years prior, CRE CLOs had started to comeback to the market, but the size of this deal — and to a lesserextent, its 24-month reinvestment period — brought some observersup short. The CRE CLO market, it had suddenly become clear, wasback. Now, as it continues to grow it will have ramifications forborrowers and lenders.

This is not to say that CRE CLOs are anywhere close to theirheyday before the recession. In 2007 and 2008 issuance was around$35 billion a year. The first vehicles to remerge after thefinancial crisis were in 2016 when between $2 billion to $2.5billion of CLOs were issued, according to stats from Wall Streetinvestment banks. Last year issuance was around $8 billion and thisyear estimates are that between $13 billion and $18 billion will beissued.