CMBS LOAN

Secure capital for commercial real estate ventures with funding from Commercial Mortgage-Backed Securities (CMBS loans). These loans are structured as securities sold to investors, offering borrowers competitive rates and flexible terms. Because lender risk is distributed across a portfolio of projects, CMBS loans can lower rates for borrowers. We often use CMBS loans to provide tailored financial solutions.

Get Started

What is CMBS Loan?

A Commercial Mortgage-Backed Securities (CMBS) loan is a type of financing where a commercial real estate loan is bundled with similar loans and sold to investors as a security. Unlike traditional loans held by a single lender, CMBS loans are pooled together, securitized, and then sold in the secondary market. This structure allows for greater liquidity and access to capital for both borrowers and investors.

For business borrowers, CMBS loans offer several key benefits. They frequently provide competitive interest rates, enabling businesses to lower their borrowing costs. With typically flexible terms, CMBS loans can be tailored to meet diverse financial needs, whether for developing, refinancing, or acquiring commercial properties. Additionally, because the loans are underwritten based on the income and value of the property, they enable borrowers to access substantial funding even with nontraditional credit profiles. This makes CMBS loans an attractive financing solution for businesses aiming to expand their real estate portfolios or optimize their capital strategies.

Property Acquisition

Leverage the income potential and value of the property to secure substantial financing without heavily relying on traditional credit qualifications.

Refinancing Existing Debt

Refinance existing real estate debt at competitive interest rates. Reduce overall borrowing costs while potentially freeing up capital for other use.

Funding Development Projects

CMBS loans provide the financial support necessary to develop new commercial properties. Projected value + cash flow increases loan mounts.

ADVANTAGES OF

CMBS Loans

Access to Large Loan Amounts
Non-Recourse Structure
Flexible Underwriting Criteria
Ease of Refinancing and Cash-Out Options
Supports Long-Term Investments

What types of properties qualify for CMBS loans?

CMBS loans are highly versatile and can be applied to a variety of property types, including retail centers, office buildings, multifamily housing, industrial properties, and hotels. The property must typically generate stable income to meet the lender’s requirements.

How does the loan servicing process work for CMBS loans?

Once a CMBS loan is issued, it is typically pooled with other loans and sold as securities to investors. The servicing of the loan, such as handling payments and borrower inquiries, is managed by a third-party loan servicer or special servicer, which differs from the original lender.

What are the limitations of CMBS loans?

While CMBS loans offer many advantages, they may feature restrictions on prepayments due to yield maintenance or defeasance requirements. Additionally, the standardized structure of these loans can make them less flexible for borrowers with unique or evolving financing needs.

When is a CMBS loan not the right fit for my business?

CMBS loans may not be ideal if your business requires frequent refinancing, significant operational flexibility, or if the property does not generate consistent income. Additionally, businesses seeking personalized loan terms or direct communication with lenders may find other financing options more suitable.