Castlelake Prices $1.1 Billion CRE CLO With Santander, Morgan Stanley and Goldman Sachs

Castlelake, L.P. priced its first commercial real estate collateralized loan obligation (CRE CLO), CLCRE 2026-FL1, on Oct. 14, 2026, in a transaction totaling approximately $1.1 billion. Santander acted as sole structuring agent, co-lead manager and joint bookrunner, alongside Morgan Stanley and Goldman Sachs as co-lead managers and joint bookrunners.

The global alternative investment firm, which specializes in asset-based private credit, said the proceeds will finance a diversified pool of commercial real estate loans. Castlelake said the deal was priced amid disruption in the commercial real estate market driven by a sharp rise in interest rates.

Collateral Pool Spans Five Property Sectors

At pricing, the initial collateral pool comprises 26 collateral interests secured by 26 commercial properties, with an aggregate principal balance of approximately $1.1 billion of floating-rate senior loans. The portfolio includes multifamily and industrial bridge loans as well as hospitality, self-storage and student housing bridge loans.

"We see attractive opportunities to provide bridge financing solutions to credible commercial real estate assets as borrowers navigate an evolving lending environment," said Alan Gearing, Partner, North American Commercial Real Estate at Castlelake. "The portfolio reflects our focus on constructing diversified portfolios underpinned by disciplined underwriting and asset selection."

Six Note Classes Offered

CLCRE 2026-FL1 consists of six offered note classes:

• $636.51 million of Class A Notes, rated AAAsf by Fitch and Aaa(sf) by Moody's
• $109.74 million of Class A-S Notes, rated AAAsf by Fitch
• $79.56 million of Class B Notes, rated AA-sf by Fitch
• $64.48 million of Class C Notes, rated A-sf by Fitch
• $38.41 million of Class D Notes, rated BBBsf by Fitch
• $19.21 million of Class E Notes, rated BBB-sf by Fitch

The six offered classes total approximately $947.9 million. The senior Class A and A-S notes together represent $746.25 million, or about 68% of the collateral balance, while the B through E classes total $201.66 million, or about 18%.

Situs Asset Management LLC is expected to serve as servicer and Situs Holdings LLC as special servicer. Computershare Trust Company, National Association is expected to act as note administrator and custodian. Hogan Lovells Cadwalader US LLP provided legal counsel to Castlelake, and KPMG provided tax guidance.

Castlelake Expands Securitization Platform

The transaction marks Castlelake's entry into the CRE CLO market and an expansion of its capital markets program into commercial real estate credit.

"This transaction marks Castlelake's entry into the CRE CLO market and an expansion of our capital markets program into commercial real estate credit, a space Castlelake has been active in for approximately two decades," said Armin Rothauser, Partner, Capital Markets at Castlelake. "At a time of significant change in the commercial real estate market, we believe the successful issuance of this transaction speaks to Castlelake's credibility across asset-based finance and the asset-based securitization markets."

With CLCRE 2026-FL1 and Castlelake Residential Mortgage Trust 2026-RTL1 (CLRES 2026-RTL1), the firm's first residential mortgage-backed security, issued in August 2026 and totaling $261.3 million, funds and investment accounts managed by Castlelake will have issued approximately $11 billion in asset-backed securities across commercial real estate, residential mortgage-backed securities, specialty finance and aviation since 2014.

Founded in 2005, Castlelake manages approximately $40 billion of assets and is a strategic partner of Brookfield Asset Management Ltd. The firm has approximately 260 professionals, including 90 investment professionals, across eight offices in North America, Europe, the Middle East and Asia.

Market Context: CRE CLO Issuance Rebounds

The deal arrives during a rebound in CRE CLO issuance. Fitch reported that $31.6 billion of bridge loans had been issued through CRE CLOs by August 2026, already exceeding full-year 2025 volume, and that 18 of 32 Fitch-rated transactions were at least $1 billion. The Commercial Real Estate Finance Council separately reported year-to-date private-label CMBS and CRE CLO issuance of $103.9 billion through August, up 21% from $85.7 billion in the comparable period.

Credit metrics in the CRE CLO sector have improved. The seriously delinquent rate in Fitch's rated CRE CLO universe fell to 0.52% in July 2026 from 0.80% at the end of the second quarter and 1.44% at the end of the first quarter, while special servicing declined to 0.85%. Modified loans, however, rose 68.6% from late 2025 to nearly $4 billion, indicating that bridge-loan performance remains tied to extensions, asset sales and refinancing.

Broader commercial mortgage credit remains more stressed. Overall CMBS delinquencies reached 7.86% in July 2026, the highest level since November 2020, as matured loans stopped paying. The office CMBS delinquency rate hit a record 12.34% in January 2026, according to Trepp.

Bridge financing can give borrowers time to stabilize occupancy, complete renovations or wait for more favorable refinancing conditions, while floating-rate structures expose borrowers to elevated debt-service costs.

Outlook

Castlelake's debut adds a new issuer to a CRE CLO market where lenders are again financing transitional assets. The pool's mix across multifamily, industrial, hospitality, self-storage and student housing is intended to reduce single-sector concentration, while the floating-rate bridge structure places emphasis on current debt-service coverage, stabilization plans and borrowers' ability to execute timely exits.

Sources

• Castlelake press release via PR Newswire: https://www.prnewswire.com/news-releases/castlelake-prices-1-1-billion-commercial-real-estate-clo-clcre-2026-fl1--302908621.html