CMBS Loans and Cash-out Refinancing

How to Get Cash Out With a CMBS Loan

The fact the CMBS loans have little to no cash-out restrictions makes them incredibly popular among commercial property owners who want to extract some of the equity from their properties. Borrowers are typically only limited by the loan’s maximum LTV requirements— usually 75% for most CMBS loans, which means they can often take hundreds of thousands— if not millions, of dollars in cash out of their property and put it to good use elsewhere.

For example, if a property worth $10 million has a remaining loan balance of $8.5 million, and the owner wanted to get a CMBS refinance with 75% LTV, they could take approximately $1 million out of the property.

Common Uses for CMBS Cash-Out Refinancing

CMBS borrowers often use cash-out refinances for purposes including:

• Renovating the property: Cash-out refinances are a great way to get funds to remodel or renovate a commercial property— and by doing so, you’ll typically increase the property’s value— which can substantially increase your leverage when it comes time to refinance your CMBS loan.

• Get working capital for a business: Instead of taking out a business loan or a commercial line of credit, CMBS cash-out refinancing can be a significantly less expensive way to get the funds your business needs to thrive.

• Purchase a new property: Whether you want to expand your real estate empire or simply open a new location for your business, CMBS cash-out refinancing can help you put a down payment on a new property, or even buy it in cash.