Greystone makes first new issue CMBS B-piece acquisition

Greystone has purchased the B-piece of BANK 2022-BNK43, a new $1.09 billion conduit deal floated by Wells Fargo, Morgan Stanley, Bank of America and NCB. The acquisition marks the first time the New York-based real estate financial services company has purchased a CMBS B-piece in the new issue market, according to a press release.

The acquisition represents Greystone’s growing interest in the higher risk, higher reward part of the conduit market. The firm has already acquired seven other CMBS B-pieces in secondary market transactions.

“We are thrilled to achieve what we have set out to do – purchase the B-piece in a significant new-issue conduit pool and establish ourselves as a player in all avenues of CMBS,” said Rob Russell, president, special servicing at Greystone.

The company, one of the largest Fannie Mae lenders, sees an expansion into the B-piece businesses as a logical next step in its broader CMBS strategy. “Our expertise in CMBS structuring, lending and both primary and special servicing has now created a full life cycle of solutions in the conduit market,” Russell said.

While the b-piece tranche carries greater risk of default, being able to serve as the special servicer offers some protection. 

“The lower tranches are control-eligible, meaning whoever owns them can control who the special servicer is, as well as being able to direct resolution strategies. You have a lot more control over the assets that secure the bond investment,” said Jenna Unell, senior managing director-special servicing at Greystone. 

 Greystone, which has a $24 billion special servicing platform, will also be the special servicer on the deal. According to a pre-sale report from Fitch Ratings, the deal is backed by 61 loans on 103 properties and has lower leverage than other recent transactions rated by the agency. Fitch estimates the deal’s LTV at 94 percent in contrast with the roughly 100 percent LTV for other deals this year. Additionally, the Fitch debt service coverage ratio of 1.43x is higher than the 2022 year-to-date DSCR of 1.34x.