Partial Property CMBS Refinancing for Mixed-Use Properties
While in most cases, CMBS loans are only allowed for individual properties or groups of properties, in some cases, one part of a mixed-use property may be eligible for CMBS refinancing. For example, if a mixed-use property is divided into residential a residential section, featuring apartments, and a retail condominium section, each owned separately, a borrower may be able to get a conduit loan to refinance only one section of the property.
However, if the borrower owns both parts of the property and currently has a loan that covers both, they would not be able to refinance only part of it with a CMBS loan. In addition, CMBS financing and refinancing is also available for office condos. The lesson: just because a property owner doesn’t own the whole property does not necessarily mean that it’s ineligible for conduit financing.