Lender launches $768.3 million CRE CLO backed by multifamily refinancing loans
Arbor Realty has returned to the commercial bond market with a new financing transaction that highlights a growing trend among apartment owners: refinancing existing loans instead of pursuing new property acquisitions.
The multifamily lender is securitizing 25 loans backed by 30 apartment properties into a $768.3 million commercial real estate collateralized loan obligation (CRE CLO). The transaction packages short-term real estate loans into bonds that are then offered to investors. Details of the offering were outlined in a presale report released by Fitch Ratings. The deal marks Arbor Realty’s second CRE CLO issuance of 2026, following a $662.6 million transaction completed in March.
Although acquisition loans represent 44.3% of the collateral pool—significantly higher than the average share seen in CRE CLO transactions rated by Fitch during 2025 and 2026—many of these loans are tied to the refinancing of existing investments rather than the purchase of new properties.
Most of the newly originated loans included in the transaction are refinancing deals, reflecting how apartment owners continue to restructure or replace existing debt as borrowing costs remain relatively high.
The largest loan in the portfolio, known as Atlanta Five, accounts for 11.7% of the overall transaction. Originated last month, the $138.9 million refinancing replaced approximately $134.6 million in existing debt while also covering reserve requirements and closing expenses. According to Fitch, the borrower contributed roughly $6.7 million in fresh equity as part of the transaction.
The financing is secured by five garden-style apartment communities containing a combined 1,309 units across the Atlanta metropolitan area. Owned by New York-based ICER Properties, the portfolio includes assets located in Atlanta, Jonesboro, Lithonia, and Morrow, Georgia. Originally constructed between 1969 and 1987, the properties have undergone approximately $24.5 million in capital improvements since being acquired in 2021 and 2022, including nearly $19.7 million invested in renovating apartment interiors.
As of June, the apartment communities were approximately 96% occupied. Average monthly rents currently stand at about $1,141 per unit, well below the local market average of roughly $1,670, suggesting additional potential for future rental income growth, according to the Fitch report.
Neither Arbor Realty nor ICER Properties provided comments regarding the financing transaction.
The offering comes as the U.S. apartment sector continues to show stable fundamentals that support lending activity. Fitch noted that slowing multifamily construction and ongoing housing affordability challenges continue to strengthen demand for rental housing across many markets.
Arbor Realty’s latest issuance is the 24th CRE CLO transaction of 2026 primarily backed by multifamily loans. Collectively, these transactions have reached $22.3 billion this year, compared with 15 similar deals totaling $15.1 billion during the same period last year, reflecting growing investor demand for apartment-backed financing.
Source: Original reporting by Mark Heschmeyer, CoStar News.
