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This article (the “Article”) is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to purchase any investment or any securities. This Article does not constitute investment advice and is not intended to be relied upon as the basis for an investment decision, and is not, and should not be assumed to be, complete. Readers should make their own investigations and evaluations of the information contained herein. The information contained herein does not take into account the particular investment objectives or financial circumstances of any specific person or entity who may receive it. Each reader should consult its own attorney, business adviser and tax adviser as to legal, business, tax and related matters concerning the information contained herein.  Except where otherwise indicated herein, the information provided herein is based on matters as they exist as of the date of preparation and not as of any future date and will not be updated or otherwise revised to reflect information that subsequently becomes available, or circumstances existing or changes occurring after the date of preparation. Certain information contained in this Article constitutes “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,”  “target,” “project,” “estimate,” “intend,” “continue” or “believe,” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results may differ materially from those reflected or contemplated in such forward-looking statements. Readers should not rely on these forward-looking statements.  Certain information reflects subjective determinations which may prove to be incorrect. There can be no assurance that the estimates or projections will be accurate or that historical trends will continue. In considering the prior performance information contained herein, readers should bear in mind past performance is not necessarily indicative of future results. All rights reserved. The material may not be reproduced or distributed, in whole or in part, without the prior written permission of PrimeAlpha LLC.

    • Feb 10, 2020

What Investors Need to Know about Senior Debt Mortgage Assets, Secured by Commercial Real Estate

What Investors Need to Know about Senior Debt Mortgage Assets, Secured by Commercial Real Estate


Investors looking at investing in mortgage assets secured by commercial real estate (CRE) typically ask two key questions regarding credit risk, as part of their due diligence process:


  1. What are the standards used to assess credit and underwrite the debt?

  2. What happens to the investment should a borrower not meet payment obligations?


Commercial real estate mortgage assets are attractive due to their potential for equity-like returns without significant volatility, supported by robust analysis and structured asset pools to ensure capital preservation and effective management of non-performing loans. Investment in CRE requires careful consideration of downside risk, primarily evaluated through rigorous credit assessment and underwriting standards alongside default management strategies.


The evolution of the CRE lending market has seen a shift from traditional to private lenders, broadening investor access and enhancing the appeal of private debt. Short-term, bridge loan mortgage assets are particularly favored for their high yields and strong collateral backing, including first-lien positions on commercial properties. These investments are designed to provide higher returns than traditional fixed incomes and incorporate additional safeguards such as borrower guarantees to minimize risk.


Access the entire article to discover the benefits of structured asset pools, rigorous underwriting processes, and the evolving landscape of CRE lending.



If you do not have a work email address, please email us at info@primealpha.com and we can email you the report directly.



Table of Contents

  • Benefits of investing in short-term, bridge loan mortgage assets

  • Risk mitigation through strong underwriting

  • A close-up look at how we underwrite commercial real estate loans

  • What happens when a borrower stops making payments?

  • How does a foreclosure work?

  • The value of investing in a commercial real estate (CRE) fund




Thanks to our Contributor


M360 Advisors


M360 Advisors invests in niche segments of private credit and manages a vertically integrated credit strategy that targets short duration commercial mortgage assets secured in first lien position by income-producing properties. The firm’s objective is to preserve invested capital and achieve attractive and sustainable risk-adjusted returns relative to traditional fixed income investments, while also providing reasonable liquidity to investors. M360 Advisors oversees the entire value chain internally – from sourcing loans all the way through to portfolio management.


By focusing exclusively on secured investments that are senior in the capital structure, we are able to deliver to our clients a rare combination of stable, uncorrelated returns with significant collateral protection.

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