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NEW YORK, Nov. 21, 2025 – Lument Finance Trust (LFT), a Maryland-based REIT specializing in commercial real estate debt investments, has announced the pricing of its new $663.8 million managed Commercial Real Estate Collateralized Loan Obligation (CRE-CLO), LMNT 2025-FL3. The deal, expected to close around December 10, 2025, aims to provide LFT with non-mark-to-market, non-recourse term financing.
Approximately $585.0 million of the CRE-CLO is anticipated to be placed with institutional investors, signaling continued investor appetite for structured credit products backed by commercial real estate. This issuance follows LFT’s redemption of its 2021-FL1 CRE-CLO on November 18, 2025, which had $436.4 million of investment-grade securities outstanding. That move suggests an active management strategy aimed at optimizing its capital structure and cost of funds.
The LMNT 2025-FL3 transaction features a 30-month reinvestment period, allowing LFT to actively manage the underlying loan portfolio and potentially enhance returns by reinvesting principal repayments and interest income. The advance rate of 88.1% provides substantial leverage, while the weighted average interest rate at issuance of Term SOFR plus 1.91%, before transaction costs, reflects current market conditions and LFT’s credit profile.
J.P. Morgan Securities LLC served as the sole structuring agent, lead manager, and sole bookrunner for LMNT 2025-FL3, with Citizens JMP Securities, LLC, acting as co-manager. The involvement of these established players in the structured finance market lends further credibility to the offering.
This CRE-CLO market has seen considerable activity in recent years, driven by demand for higher-yielding assets in a low-interest-rate environment. However, investors should be aware of the inherent risks associated with CRE-CLOs, including potential credit losses on the underlying loans, interest rate volatility, and the complexities of managing a diversified loan portfolio.
LFT’s focus on transitional, floating-rate commercial mortgage loans, particularly within the middle-market multi-family sector, positions it to capitalize on opportunities arising from property renovations, repositioning, and changing market dynamics. This strategy, however, also exposes LFT to risks associated with borrower execution and the overall health of the multi-family market.
About Lument Finance Trust
Lument Finance Trust is a Maryland corporation externally managed and advised by Lument Investment Management, LLC a Delaware limited liability company, specializing in commercial real estate debt investments. The Company primarily invests in transitional floating rate commercial mortgage loans with an emphasis on middle-market multi-family assets.
Forward-Looking Statements
This release contains forward-looking statements subject to risks and uncertainties. These statements, identified by terms like “believe,” “expect,” “anticipate,” and similar expressions, concern future business results, financial condition, liquidity, and plans. Factors detailed in LFT’s SEC filings, including the Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, could cause actual results to differ materially from expectations. LFT disclaims any obligation to update or revise these forward-looking statements, except as required by law.
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