What are Commercial Mortgage-Backed Securities?
Commercial mortgage-backed securities comprise of packages of commercial property mortgages spanning a range of sectors, such as shopping centres and retail parks; offices; industrials such as logistics warehouses; and the hospitality sector, including hotels. Historically, European commercial real estate (CRE) lending was undertaken by banks who then issued CMBS, though alternative CRE lenders such as private equity and real estate debt funds also now participate in CMBS issuance.
Why Janus Henderson for CMBS?
Expertise and leadership: Our portfolio management team's nearly 60 years of combined experience, backed by a dedicated global team, stands as a testament to our success. This unparalleled expertise ensures we remain at the forefront of securitised investment management.
Market dominance: Janus Henderson has been at the forefront of active fixed income ETF innovation and has an extremely successful proposition where we are the third largest provider of actively managed fixed income ETFs globally¹ and the largest securitised active ETF manager globally².
¹ Source: Morningstar as of 30 September 2024.
² Source: Morningstar, as of 16 December 2024.
€51B
Firmwide securitised assets (as of 30/06/25)
Source: Janus Henderson Investors as of 30 June 2025.
Note: Firmwide assets include securitised products available outside of Europe and securitised portions of other fixed income strategies.
Dedicated securitised expertise
Global Head of Securitised Products | Portfolio Manager
Portfolio Manager
Lead - Fixed Income Client Portfolio Management (EMEA) / Fixed Income ESG
Key characteristics of CMBS
1
Compelling yield opportunities
CMBS may offer attractive yields compared to corporate bonds of similar credit quality and maturity.
2
Commercial real estate exposure
The European CMBS market gives investors access to five main sub-sectors of commercial real estate: shopping centres and retail parks; offices; industrials such as logistics warehouses; and the hospitality sector, including hotels.
3
Investor-friendly loan provisions
Prepayment penalties for borrowers ensure that prepayment risk in CMBS remains very low. When prepayments occur, investors may receive compensation from the borrower.
4
Strong credit ratings on offer
CMBS may help to increase a portfolio’s overall credit quality due to the availability of tranches with strong credit ratings.
Risk considerations for CMBS
Credit risk: Like other fixed income securities, CMBS are exposed to the risk of default.
Extension risk: If a CMBS loan matures in a difficult refinancing environment, the servicer may modify or extend the loan instead of foreclosing. In such scenarios, investors could get their principal back later than originally expected.
Recovery risk: Unlike residential real estate loans, commercial mortgages are non-recourse loans, meaning only the attached property can serve as collateral for the loan. This may result in lower recovery rates (i.e., the percentage of defaulted debt that can be recovered by a lender) for CMBS versus RMBS.