Bank of America has launched Taurus 2025-1 EU DAC, a €259.8 million securitisation of a portfolio of logistics properties owned by Carlyle Group, in the third European commercial mortgage-backed security of the year.
The transaction means volumes for the year are more than half of those from full-year 2024 and more than 2023 as more competitive pricing encourages activity.
The CMBS, which is being rated by Fitch and Morningstar DBRS, is collateralised by 100% of a senio- term facility refinancing a portfolio of 37 logistics properties. The assets are across Germany and France and were bought by the Carlyle Group during 2020 and 2021 in 10 transactions, including as part of a sale-and-leaseback with the main occupier Kuehne + Nagel which has 55% of the passing rent.
The portfolio comprises mainly single-let medium-box logistics properties and located in out-of-town sites within reasonable driving distance of French or German populations. K&N occupies 25 of the 37 and there is near-100% occupancy. On 13 December, Bank of America Europe DAC, the original lender or the loan seller, entered into a common terms agreement with the borrowers, ultimately The Carlyle Group, and a French law local loan agreement.
On 31 October, Cushman & Wakefield conducted valuations on the properties and appraised their aggregate market value at €384.4 million, which translates into a day-one loan-to-value ratio of 67.5%.
The CMBS is the third to launch in Europe in 2025, a major increase in activity on the last three years.
Last week, Blackstone's first European CMBS of the year, the €525 million Sequoia Logistics 2025-1 DAC, the largest euro-denominated issuance CMBS since 2021, priced at a weighted average margin of 192 basis points, the tightest on a direct CMBS in four years, as reported.
In January, presales ratings were assigned to Pembroke Property Finance 3 DAC, a €343.6 million multi-borrower securitisation focused on Irish properties. Finance Ireland, the non-bank lender owned 48% by Pimco and 42% by M&G, is the sponsor, which comprises 110 non-recourse commercial property loans to 68 borrowers secured against 234 properties across the Republic of Ireland.
CMBS transactions appear to be becoming more plentiful and diverse in terms of the borrower in response to more competitive pricing.
CMBS deals priced tighter as 2024 progressed thanks to falling interest rates. There were five European deals in the year, totalling €2.3 billion, meaning this year's transactions already total more than half of last year's and more than 2023 and 2022 put together. The only deal that did not involve Blackstone last year was Vantage’s £600 million data centre CMBS. Three of Blackstone's transactions involved logistics properties, underlining investor demand for the asset class.
In 2023, there were three CMBS transactions, totalling €909 million, 40% less than the €1.5 billion issued in the first four months of 2022, before the market shut down. The figures are way down on the €7 billion issued in 2021.