Dwight Mortgage Trust’s Chris Baker On Closing the REIT’s First CLO

Dwight Mortgage Trust (DMT) priced its inaugural commercial real estate collateralized loan obligation (CRE CLO) last month in a move aimed at expanding the lending platform’s capital markets presence.

The $925 million DWIGHT 2025-FL1 deal was backed by a pool of multifamily loans collateralized by 30 assets across the U.S. The deal, which J.P. Morgan Chase led, was the culmination of a chief goal established by Chris Baker, who joined DMT in August 2024 as head of capital markets. DMT is a real estate investment trust affiliate of Dwight Capital. 

Baker, who arrived at DMT from Mack Real Estate Credit Strategies, sat down with Commercial Observer to discuss what the lender’s first CLO means for the company, how the overall CLO multifamily market is shaping up in 2025, and his long-term goals for the securitization vehicle. 

The interview has been edited for length and clarity. 

Commercial Observer: What was the catalyst for deciding to close Dwight Mortgage Trust’s first CLO?

Chris Baker: The catalyst was twofold. It was both scale and strategic timing. 

We reached a critical mass of high-quality institutional, transitional multifamily loans on our balance sheet, and at the same time market spreads had tightened pretty meaningfully in early 2025. The deals that went off very early in year eight made the execution particularly attractive from across the capital standpoint. There was a little bit of fun in the middle with Liberation Day tariffs spreads coming out in the April time frame, and I think they came back in enough where it made sense for us to execute back in June. 

We also saw this as a way to turn out mark-to-market exposure on the warehouse side, and also recycled capital pretty efficiently back into our pipeline. 

What was investor demand like for this deal, and how did it compare to the overall CLO market in 2025?

It was certainly interesting going for a managed deal as our first deal, which is maybe a little bit atypical. But I think we were very encouraged by the level of investor support, especially in senior tranches. 

There’s a little bit of broader market volatility that impacted part of the CLO market, but I think the multifamily sector has been a relative outperformer versus some of the mixed pools, so I think that allowed investors to get comfortable. A lot of investors took the time to really engage with our platform and understand what makes Dwight’s strategy unique. 

I think we benefit really greatly from having the J.P. Morgan team lead the transaction, and we’ve had a long-standing relationship with them for over six years. Their guidance and market insight were instrumental in the execution, and I think, ultimately, investors were receptive to our underwriting, our transparent credit approach and our alignment of interests. The way we compensate originations is based on exit fees instead of origination fees, so it’s slightly different than the market. 

In the end, the strength and diversification of the asset pool also really resonated with the market. We had 31 loans anywhere from $4 million to $75 million. We were pleased up and down the capital stack with the execution that J.P. Morgan was able to achieve,

How do you see the CLO market playing out for multifamily loans going forward?

It’s been a banner year for the CLO space already with $18 billion of originations year-to-date. I don’t think the second half will be as active, but I think especially multifamily-focused series CLOs are going to continue to be a resilient part of the structured credit landscape. 

We expect future CLOs issuance in the multifamily space to be a little bit more bifurcated. Those mixed-pool deals have struggled and been culled down a little bit early compared to the multifamily deals with really strong issuers, which continued to perform well. We’re highly focused on being one of those strong issuers that has clean data, a disciplined structure that supports the deal, and that makes sure that from an investor reporting standpoint we’re doing everything that we need to do. We want to be a programmatic issuer, and a best-in-class issuer in the CLO space. 

What does adding a CLO platform mean for Dwight Mortgage Trust’s growth and expansion as a lender?

Doing a CLO deal  was my No. 1 goal when I joined about a year ago, so I think for the overall Dwight platform it’s a major milestone. It gives us a fairly capital-efficient, scalable way to grow and finance originations and allows us to be more competitive in the market, offer our borrowers better terms and certainty of execution on pricing, and then it also elevates the Dwight brand with institutional partners. 

We see ourselves as being a serial issuer. I think that hopefully signals credit sophistication and operating maturity, and that should hopefully lead to more investor trust, deeper relationships and better pricing over time.

What are your goals for DMT’s CLO platform?

In the near term, it’s supporting our first deal and getting our ramp fully deployed. We had a slightly more than $150 million ramp to start. And then we want to make sure that internal processes, especially investor reporting, are best in class.

In the longer term, as a programmatic issuer we want to execute on one to two deals a year, depending on loan production and market conditions and build a consistent issuance cadence, maintaining reinvestment flexibility and positioning DMT as a repeat, reliable issue in the CLO space. 

That’s going to allow us to continue to scale our overall lending platform efficiently while also deepening our relationships with the institutional investor base. 

Andrew Coen can be reached at acoen@commercialobserver.com.