Global commercial real estate finance firm Greystone closed a more than $900M collateralized loan obligation vehicle secured by 28 apartment properties in 16 states.

The CLO, which closed on May 21, contains 13 whole loans and 15 loan participations, with 13.5% of them focused on Georgia, 11.6% in New Jersey and another 10.5% in Texas, Greystone announced in a release.

It is the latest in a wave of CLO issuances as investors flock to the vehicle amid a surge in market volatility. More than $7B in commercial-backed CLOs were issued as of March, a 374% increase from the same period in 2024. Blackstone Mortgage Trust, TPG Real Estate Finance Trust, Invesco and Arbor Realty Trust have all issued CLOs this year, most around the $1B mark.

CLOs bundle debt, which is then sliced into tranches of varying risk and return levels. The way they are set up has made them attractive to investors. Since bond coupons float with the Secured Overnight Financing Rate, CLOs are insulated from interest-rate volatility. And most of the CLO debt is considered high quality, with 65% rated AAA, according to asset manager Lord Abbett. No CLO tranche rated single A or higher has experienced a loss from default, the firm said.

CLOs have amassed about two-thirds of all leveraged loans in the U.S. this year, according to Bloomberg. CLO issuance activity is fast putting a strain on the supply of available loans, PineBridge Investments Portfolio Manager Kevin Wolfson said.

“It really feels like we’re back in the situation where demand for CLO debt is going to outpace supply,” Wolfson told Bloomberg last week. “From a loan supply perspective, unless we really see a material pickup in new issue loan supply, CLOs are going to have to turn to the secondary market.”