commercial mortgage-backed securities (CMBS)
Commercial mortgage-backed securities are securitized loans backed by commercial mortgages covering a wide range of property types including multi-family, office buildings, industrial and warehouses. This is a specialized subcategory of commercial real estate investing.
Opportunities and Trends
Axonic believes that there are appealing opportunities in the CMBS market, particularly multifamily housing. In 2014, Axonic was chosen as the initial third-party purchaser of Freddie Mac Small Balance Loan (SBL) B-Pieces at the inception of the program and has been an active participant in K-Series primary and secondary markets since 2013. During this time, Axonic has invested over $1.5 billion in Freddie Mac multifamily B-Pieces across the SBL and K-Series Programs.
More broadly, commercial real estate loan maturities are set to rise in the coming years as loans originated post-Great Financial Crisis come due. The post-pandemic environment has seen significant cash flow disruption across asset classes and geographies alike, adding uncertainty and unique layers of risk to this coming maturity wave. One of the principal disruptions is the changing ways in which companies and individuals work – effectively where and how we work. Within the context of loan maturities and office properties, Axonic believes there will be structural opportunities that will provide compelling upside for those well-versed in securitized structure and workout of distressed mortgage loans.
We focus exclusively in the structured credit space and have since the inception of Axonic. We pass this edge on to our investors with fixed income investments that often provide enhanced returns and diversification away from the broader public markets.
Most of our executive leadership team has been together since the inception of our firm. This provides our investors with a cohesive client experience and a unique business model that has withstood market ups and downs.
An unwavering long-term view is critical to overcoming the inevitable highs and lows in market cycles. Remaining calm, relying on data and resisting the urge to react from emotion is what makes Axonic exceptional.
Combined, our firm has hundreds of years of experience in structured credit. No one is a generalist; we are all focused on our specific practice sectors that gives our team the potential of surpassing the broader markets.
For more information about our historical performance and examples of investment opportunities, please contact us. Please note this information is only available to accredited investors and qualified purchasers.