Deer Park Road Highlights Opportunities in CRE Market Distress as Signs of Stabilization Emerge

STEAMBOAT SPRINGS, Colo., Nov. 20, 2025 /PRNewswire/ -- Deer Park Road Management Company, LP ("Deer Park"), a $2.8 billion alternative asset management firm specializing in structured credit markets, today outlined its strategic approach to capitalize on emerging opportunities in the Commercial Mortgage-Backed Securities (CMBS) sector. As the commercial real estate (CRE) market continues to navigate distress, Deer Park proactively identifies value amidst volatility and market bifurcation, leveraging its deep expertise.

"Today's CRE landscape presents challenges but we also see opportunities," said Scott Burg, Chief Investment Officer and Managing Partner at Deer Park Road. "After years of repricing, forced sales, and refinancing uncertainty, we're seeing green shoots in market stabilization. The dispersion between high-quality assets and distressed cohorts is widening and that plays directly to our strengths."

Market Context: From Distress to Selective Repricing

According to Deer Park, across the CMBS and broader CRE landscape, dislocation remains significant, but trends are reshaping the opportunity set:

• Repricing and Distressed Sales Creating Attractive Entry Points
  Recent asset repricing and distressed transactions have dramatically lowered recovery expectations, setting the stage for value-driven investors. For example, landmark properties that once traded at nine-figure valuations are now clearing for a fraction of prior values, underscoring how repricing cycles create asymmetric upside for patient capital.
• Downgrades and Forced Selling Driving Mispricing
  Ongoing ratings downgrades and redemption-driven liquidations continue to pressure sellers. With fewer active buyers in the credit-sensitive CMBS market, this dynamic has produced a true buyer's market for select tranches.
• Wide Spreads Reflect Persistent Uncertainty
  Despite stabilizing fundamentals in some segments, credit spreads remain historically wide as investors weigh sector-specific risks, particularly in office and retail. This dislocation creates a fertile hunting ground for strategies grounded in loan-level analysis and disciplined risk management.
• Refinancing Market Shows Renewed Activity
  New issuance is rising, signaling renewed confidence in the refinancing pipeline. Notably, Brookfield's $1.3 billion refinancing of 660 Fifth Avenue in New York City demonstrates that well-capitalized sponsors can access the market, even amid broader headwinds. This deal was supported by a $1.21 billion CMBS loan and marquee tenants such as Citadel and Scotiabank.
• Sublease Space Beginning to Normalize
  Select office markets, including New York City, are showing improvement as sublease availability drops below pre-pandemic levels, suggesting gradual absorption and improving fundamentals.

Deer Park's Strategic Response

Deer Park's experience navigating multiple market cycles, from the Global Financial Crisis to COVID to the recent rate-shock period, positions the firm to capitalize on the current environment.

"Having worked out and traded CMBS through major disruptions in the last two decades, we recognize patterns in servicing behavior and we know recovery math. We prefer measurable risk over yield-chasing, and that discipline is precisely what today's market requires," Burg said.

Deer Park deploys a "Four Pillars" CMBS investment framework to identify bonds trading below intrinsic value - fundamentals-driven, bottom-up property evaluation; rigorous due diligence; and detailed loan-level modeling, Deer Park recently launched the Commercial Mortgage Opportunity Fund I (CMOF) as a closed-end vehicle designed to generate long-term capital appreciation through strategic investments in distressed and dislocated CMBS. Structured in a private-equity style format, the fund provides qualified and accredited investors with access to institutional-grade opportunities typically unavailable through traditional channels.

"Periods of distress often mark the beginning of new opportunity cycles," said Michael Craig-Scheckman, Founder and Chief Executive Officer of Deer Park Road. "Our deep experience in CMBS restructurings and workouts, combined with our disciplined approach to security selection, led us to launch CMOF. We believe the current market presents one of the most attractive opportunity sets in years."

About Deer Park Road Management Company

Deer Park maintains a globally diverse investor base including sovereign wealth, pension funds, endowments, family offices, and high-net-worth individuals. Deer Park manages multiple funds and strategies with a combined AUM of $2.8 billion, maintaining a consistent focus on capital preservation, structure, and collateral quality.

Founded in 2003 and headquartered in Steamboat Springs, Colorado, Deer Park Road Management Company is an SEC-registered investment adviser specializing in structured credit and distressed fixed-income investing (registration of an investment adviser does not imply a certain level of skill or training.) The firm is recognized for its disciplined approach to risk management, deep analytical expertise, and commitment to long-term value creation. Deer Park's flagship hedge fund has delivered strong returns across market cycles by identifying undervalued opportunities in mortgage-backed and asset-backed markets.

Media Contact:
Charlotte Luer
[email protected]
239-404-6785

SOURCE Deer Park Road Management Company