Tap to get financing
CMBS Loans
Property types
Mobile Home Park CMBS LoansHospital CMBS LoansIndustrial CMBS LoansHotel CMBS LoansRetail CMBS LoansSelf-Storage CMBS LoansMixed-Use CMBS LoansOffice CMBS LoansApartment CMBS LoansCMBS Property Types
Loan basics Loan terms
About
TeamLeadership
Loan docs Blog CMBS Alternatives
Get financing
Was This Article Helpful?
Newly Published
Jun 14 at CMBS Loans
Pooling and Servicing Agreements: What CMBS Borrowers Need to Know
Jun 14 at CMBS Loans
CMBS Servicing: What Borrowers Need to Know
Jun 14 at CMBS Loans
CMBS and REITs: What Commercial Borrowers Should Know
Explore the Janover Network
Jan 27 at Multifamily Loans
4 Steps to Increase Your Apartment Building's Occupancy
Jan 26 at Commercial Real Estate Loans
How Does ChatGPT Work With Commercial Real Estate?
Jan 25 at Commercial Real Estate Loans
Capital Gains Taxes in Commercial Real Estate
CMBS Loan Secrets
Last updated on Nov 25, 2022
2 min read

CMBS Loans for Owner-Occupied Commercial Real Estate

In general, CMBS loans are not available for owner-occupied commercial real estate. Instead, businesses usually need to get a bank loan or an SBA loan if they want to purchase a building that they will occupy. However, in certain situations, larger businesses may be able to utilize conduit financing to purchase an owner-occupied commercial property.

Apply for a loan in minutes and get multiple quotes today → Get Quotes

In general, CMBS loans are not available for owner-occupied commercial real estate. Instead, businesses usually need to get a bank loan or an SBA loan if they want to purchase a building that they will occupy. However, in certain situations, larger businesses may be able to utilize conduit financing to purchase an owner-occupied commercial property.

In most circumstances, owner-occupied conduit loans are only available for properties that are partially owner-occupied. For example, if mid-size or larger business purchases a property and only uses a certain portion of it, say 50-60%, and decides to rent out the remaining portion to a tenant with great credit, the property could be CMBS-eligible.

Owned-Occupied CMBS Loans Have Stricter Lending Requirements

If only part of the building is owner occupied, the remaining barrier to conduit financing remains the financial strength of the company itself. Since owned-occupied CMBS loans are significantly riskier for lenders, they will most likely want to take a look at the borrower’s credit score and see audited tax and income statements for the last several years. Companies with growing revenues, strong profits, and low amounts of debt are generally good candidates. In general, lenders are more likely to approve of owner-occupied CMBS refinancing, and somewhat less likely to approve of the acquisition of a property that the borrower plans to occupy in the future.

If the lender decides to approve the borrower, the borrower will most likely have to form a separate entity (if they have not already done so), in order to lease the property back to themselves. In many cases, the borrower will sign a long-term “synthetic lease” with the building-owning entity. Just as with other conduit loans, this entity must typically be a bankruptcy-remote special purpose entity (SPE), in order to reduce risks for both the borrower and the lender.

Categories
  • CMBS Loans
  • Conduit Loans
Tags
  • Conduit Financing
  • CMBS Financing
  • Owned-Occupied CMBS Loans
  • CMBS Loans
  • Owned-Occupied Conduit Loans

Getting commercial property financing should be easy.⁠ Now it is.

Click below for a free, no obligation quote and to learn more about your loan options.

Get financing →
Janover logo

CMBS Loans is a Janover company. Please visit some of our family of sites at: Multifamily Loans, Multifamily Today, Commercial Real Estate Loans, SBA7a Loans, CMBS Loans, Apartment Loans, HUD Loans, HUD 221d4 Loan, HUD 232 Loan, HUD 223f Loan, HUD 223a7 Loan, SBA Express Loans, SBA 504 Loans, and OpportunityZones Help.

Janover Inc.

6401 Congress Ave
Ste 250
Boca Raton FL 33487

hello@cmbs.loans

Property types

Mobile Home Park CMBS Loans
Hospital CMBS Loans
Industrial CMBS Loans
Hotel CMBS Loans
Retail CMBS Loans
Commercial mortgage calculator

Self-Storage CMBS Loans
Mixed-Use CMBS Loans
Office CMBS Loans
Apartment CMBS Loans
CMBS Property Types

Site Information

Privacy Policy
Terms of Use

This website is owned by a private company that offers business advice, information and other services related to multifamily, commercial real estate, and business financing. We have no affiliation with any government agency and are not a lender. We are a technology company that uses software and experience to bring lenders and borrowers together. By using this website, you agree to our use of cookies, our Terms of Use and our Privacy Policy. We use cookies to provide you with a great experience and to help our website run effectively.

Freddie Mac® and Optigo® are registered trademarks of Freddie Mac. Fannie Mae® is a registered trademark of Fannie Mae. We are not affiliated with the Department of Housing and Urban Development (HUD), Federal Housing Administration (FHA), Freddie Mac or Fannie Mae.

Copyright © 2022 Janover Inc. All rights reserved.