Nomura Prices Largest Single-Bank SASB CMBS in Two Years – Commercial Observer
As it approaches its first birthday, Nomura Securities’ commercial real estate lending platform has an extra reason to celebrate: It just sealed the largest sole-bank single-asset, single-borrower commercial mortgage-backed securities (SASB CMBS) deal in almost two years.
The $719 million KELR 2026-MF deal is backed by 12 multifamily properties and one student housing asset, all owned by Keller Investment Properties. Nomura is the sole lender in the floating-rate, interest-only deal, which has a two-year term with three one-year extension options.
The deal marks not only the largest single-bank SASB since August 2024, but it also places it among the largest single-bank SASB deals since 2020 — not too shabby for a platform that launched only last summer. Further, the transaction received a strong response from investors and was multiple times oversubscribed, sources said.
Newmark brokered the financing, and the AAA bonds — rated by Fitch Ratings and Moody’s — priced at 135 basis points over the Secured Overnight Financing Rate earlier this week.
The portfolio collateral is spread across Utah, Nevada and Arizona, and totals 3,321 units, including the sole student housing property in the portfolio, which accommodates students at Utah Valley University. Keller acquired the portfolio between 2001 and 2022, and has since invested $46 million in capital improvements, according to Fitch’s presale report. The CMBS loan proceeds will refinance $696 million in existing debt on the portfolio and also fund $22.2 million in closing-related costs and reserves.
The transaction may have been a first for Nomura, but it was also one for Keller Investment Properties, based just outside of Salt Lake City, which historically has been a borrower of agency debt, sources said. As such, KELR 2026-MF marks the company’s SASB CMBS debut.
The deal closed in just over 60 days, which one source described as “a land speed record category for a first-time CMBS borrower.”
“We are pleased with the outcome of the portfolio refinance,” Matt Bowen, executive vice president at Keller, told Commercial Observer. “This was our first venture into the CMBS world, and it came with challenges unique to us. Fortunately, the team at Nomura provided thorough, insightful and patient guidance through the complex process. We feel the oversubscription was a direct result of their knowledge and commendable efforts and the quality of our portfolio. We had additional assistance from our lending partners at Newmark who acted as invaluable advisers to us in anticipating pinch points and technical needs. With the Newmark team adding to a coordinated workflow with Nomura, we were able to stay within our budgeted timeframe and execute with relative ease.”
Bowen said financing “will only build on the current legacy of the company built by our owner, Scott Keller, and we now look forward with optimism for the continued improvement in the Western states where our properties are located.”
Newmark led a vigorous financing process on behalf of Keller, with five or six banks initially being approached with the lending opportunity. What ensued was a series of proposals being put forward from each bank, regarding how best to execute the deal.
Taking on a transaction of that size as the sole lender — let alone a lender who hasn’t celebrated year one — was no mean feat, and Nomura went head to head with some much bigger, more established CMBS platforms in competing for the deal. Given it was Keller’s first CMBS deal, part of the winning formula for Nomura was the fact it was a tightly knit and highly coordinated team. As a smaller group of 27, the Nomura team offered plenty of communication and transparency, as well a white glove approach to the transaction under leader Larry Kravetz, sources said.
It’s been an impressive start for Nomura, which relaunched its U.S. commercial real estate lending platform last September, bringing on Kravetz as head of U.S. CRE and CMBS, Frank Gilhool as head of U.S. CRE warehousing, and several others from their team at Barclays.
In its 11 months on CMBS Earth, the platform has already been involved in 12 SASB deals, some of which have been multifamily only. Generally speaking, multifamily deals continue to be very well received by CMBS bond investors, and so the collateral profile — as a very high-quality multifamily portfolio — was very favorable and a big draw for prospective lenders. Seeing as Keller didn’t have entrenched relationships within the CMBS universe, however, there was an opportunity for Nomura to compete on merit and showcase the growing platform’s capabilities, one source said.
In comparing the KELR 2026-MF deal to Blackstone’s BX Trust 2026-PNDA, a two-year, floating-rate, interest-only deal that closed around May 15, the majority of KELR bond classes priced inside of that deal, even though the KELR deal had higher leverage at 77 percent compared with PNDA’s 70 percent.
Not bad for an (almost) 1-year-old.
Newmark and Nomura declined to comment.
Cathy Cunningham can be reached at ccunningham@commercialobserver.com.
