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orningstar DBRS reports that European commercial‑real‑estate collateralised loan obligations (CRE CLOs) still trail U.S. peers. Multicurrency exposure, a small specialised investor base, and differing national CRE laws make the asset class less attractive. The rise of non‑bank lenders issuing short‑term, transitional real‑estate loans could spur growth of CRE CLOs within the European CMBS market. Although no single definition exists, European CRE CLOs typically hold transitional assets and feature a loan pool that a collateral manager actively re‑balances without seeking investor consent, provided eligibility rules are met. Investors are drawn to these vehicles for diversified CRE debt exposure, while lenders gain funding and capital relief. The report highlights these dynamics as key to the future of European CRE CLOs.
