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CMBS Loan Secrets
Our CMBS loans blog discusses everything you need to know about this type of financing, including rates, terms, property types, and trends. We also compare CMBS loans with other types of financing to help you make the best decision for your needs.
Liability Insurance for CMBS-Financed Commercial Properties
Explore the critical aspects of liability insurance for CMBS-financed commercial real estate. Understand coverage requirements, policy limits, and how to protect your investment from third-party claims.
Business Interruption Insurance for CMBS-Financed Properties
Discover the essentials of business interruption insurance for CMBS-financed commercial real estate. Learn coverage requirements and how to safeguard your property's income-generating potential.
Property Insurance for CMBS-Backed Commercial Real Estate
There are some nuances you've got to be aware of with insuring a CMBS-financed commercial property. Understand full replacement cost, agreed amount endorsements, deductible considerations, and how to protect your investm…
Insurance Guidelines for Commercial Properties With CMBS Loans
Explore the critical insurance requirements for CMBS-financed commercial properties. Learn about key coverage types and how Janover Insurance Group can help you navigate complex CMBS insurance needs.
CMBS and REITs: What Commercial Borrowers Should Know
A real estate investment trust (REIT) is a firm that acquires, owns, and operates income-producing commercial real estate, or, in the case of mortgage REITs, commercial mortgages. REITs may be either publicly traded or n…
CMBS Servicing: What Borrowers Need to Know
Unlike traditional bank loans, CMBS loans are not serviced by the lenders that issue them. Instead, after conduit loans are securitized and sold as commercial mortgage backed securities, they are serviced by third-party …
Can Trepp Provide Valuable Market Data for CMBS Borrowers?
Trepp is a data analytics and software company which provides information and insights about the CMBS and commercial real estate markets. While Trepp’s products are mainly targeted towards institutional bond investors, b…
CMBS ETFs: How Do They Affect Borrowers?
An exchange-traded fund (ETF) is a fund comprised of securities that is regularly traded on major stock exchanges. CMBS ETFs are exchange-traded funds composed of commercial mortgage backed securities (CMBS). A commercia…
Pooling and Servicing Agreements: What CMBS Borrowers Need to Know
A pooling and servicing agreement (PSA), is a contract that is required when loans, including CMBS loans, are pooled together and packaged into mortgage backed securities. For CMBS loan borrowers, this means that they mu…
CMBS Default and Delinquency Rates: What Borrowers Should Know
While CMBS lenders’ underwriting standards are stricter than they once were, a certain amount of conduit loan borrowers still default on their loans. It’s generally understood that a loan default is something that borrow…
ABS: Asset Backed Securities vs. CMBS: Commercial Mortgage Backed Securities
Asset backed securities (ABS) are financial securities backed by a pool of assets that produce income, generally loans. In the case of mortgage backed securities (MBS) and commercial mortgage backed securities (CMBS), th…
What is a REMIC (Real Estate Mortgage Investment Conduit)?
A Real Estate Mortgage Investment Conduit, or REMIC, is an entity which is utilized to pool loans and issue mortgage backed securities (MBS), or commercial mortgage backed securities (CMBS). First authorized by the Tax R…
The CMBS Origination Process: What Borrowers Need to Know
CMBS loan origination is the process in which a conduit lender analyzes a borrower’s commercial loan application, determines their suitability for financing, presents the terms to the borrower, and, if both parties agree…
CMBS Primer: A Basic Guide to CMBS/Conduit Loans
CMBS loans, also referred to as conduit loans, are one of the most popular ways to finance commercial real estate in the United States. They are offered for almost all types of income-producing commercial properties, suc…
Why CMBS Risk Retention Rules Are Reducing The Amount of Conduit Lenders
While conduit loan issuances have risen steeply in the last few years, the amount of lenders has actually fallen slightly, and experts believe that’s a direct result of a new federal risk retention rule that took effect …
What is a Master Servicer?
Since CMBS loans are pooled together, packaged into commercial mortgage backed securities, and sold to investors, they are not generally serviced by the lender that originated the loan. Instead, conduit loans are typical…
CMBS News Updates: Spring 2019
In the first quarter of 2019, a variety of trends and events have impacted the state of CMBS and conduit financing in the United States. Looking back at the 2018 year, while overall commercial loan transaction volume was…
CMBS Structure: What You Need to Know
A CMBS, or Commercial Mortgage Backed Security, consists of a group of commercial property loans that have been pooled together and securitized, in order to be sold to investors. These securities are broken into various …
What are CMBS Tranches?
Just like asset backed securities and mortgage backed securities (MBS), commercial mortgage backed securities (CMBS) are divided into tranches based on credit risk. The highest-rated, least risky loans will be placed in …
Hotel PIPs: Funding a Property Improvement Plan with a CMBS Loan
If you own a branded hotel or hotel franchise, you may be interested in participating in your franchise’s property improvement plan (PIP). Property improvement plans are typically required in order to bring a hotel in li…
CMBS vs. RMBS: What You Need to Know
Mortgage backed securities (MBS) come in two main varieties; commercial mortgage backed securities (CMBS) and residential mortgage backed securities (RMBS). While CMBS are backed by large commercial loans, referred to as…
What is a CMBX Index?
CMBX indexes track the market for CMBS (commercial mortgage backed securities), securities that themselves are backed by CMBS loans. CMBX indexes are an invaluable tool for investors who want to invest in CMBS, but they …
What is a Special Servicer?
CMBS loans are pooled together, securitized and sold to investors on the secondary market. Therefore, they are not generally serviced by the original lender. Instead, they are generally serviced by a master servicer, a t…
What is a CMBS B-Piece?
When CMBS loans are pooled together to create commercial mortgage backed securities, these securities vary in credit quality and payment priority. Typically, they are divided between investment grade securities, (AAA/Aaa…
Special Purpose Entities in Relation to CMBS Loans
If you’re considering taking out a CMBS loan for a commercial property, your lender will typically require you to form a special purpose entity, or SPE, that will own the property and will act as the legal borrowing enti…
CMBS SASB: Single-Asset, Single-Borrower Conduit Loans
While the average CMBS, or commercial mortgage backed security, often consists of a pool of 50-100 loans, single-asset, single-borrower (SASB) conduit loans consist of one, large loan for a single property that is securi…
CMBS vs. Life Company Loans
CMBS vs. Life Company Loans: how conduit financing compares with life insurance company loans for commercial real estate borrowers.
Conduit Lenders List: The Largest Conduit Lenders of 2018
While in an earlier article, we looked at the top CMBS lenders of 2017, we’ll now take a look at some more recent data. As of the first quarter of 2018, the top conduit lenders included JP Morgan Chase Bank, Deutsche Ban…
Can You Refinance an SBA 7(a) Loan with a CMBS Loan?
If you’re a business owner that currently has an SBA 7(a) loan on a commercial real estate property, you may want to consider refinancing it with a fixed-rate CMBS loan. This is especially the case if you want to reduce …
CMBS vs. SBA 504 Loans
CMBS loans and SBA 504 loans are two incredibly popular forms of commercial real estate financing, but they have several important differences. CMBS loans, also known as conduit loans, are issued by lenders, pooled with …
CMBS Loans vs. Portfolio Loans: What's the Difference?
When it comes to commercial real estate lending, there are typically two major kinds of loans, CMBS loans, also known as conduit loans, and portfolio loans. Conduit loans and portfolio loans have several key differences,…
Yield Maintenance in Relation to CMBS Loans
While many conduit loans require that borrowers engage in defeasance if they want to prepay their loan, some lenders permit borrowers to prepay using yield maintenance. Yield maintenance involves a borrower paying off th…
Can You Refinance Part of a Mixed-Use Property With a CMBS Loan?
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 proper…
The CMBS Loan Securitization Process
The CMBS securitization process involves a lender taking a variety of conduit loans, often up to 100 at a time, pooling them together, and selling them as bonds. Typical conduit lenders usually have between 3 and 8 secur…
Defeasance Definition: How Defeasance Relates to CMBS Loans
Borrowers often consider conduit loans’ strict prepayment penalties to be one of their major downsides. Many CMBS loans must be prepaid in a process called defeasance, which involves a borrower purchasing alternative sec…
Lockouts in Relation to CMBS Loans
For borrowers, prepayment penalties can be one of the most challenging aspects of CMBS loans. In addition to prepayment penalties, however, most conduit loans have a lockout period, a period of time in which the loan can…
CMBS Loans and Co-Working Spaces: What You Need to Know
If you own one or more office properties, and you want to get CMBS financing in the near future, should you rent space to co-working companies like WeWork? The answer is complex; while co-working has been growing at a br…
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, i…
Conduit Loans vs. Fusion CMBS
Unlike traditional conduit loans, fusion CMBS transactions combine a large amount of smaller CMBS loans with bigger, investment grade loans. This is designed to reduce overall risks for lenders, as larger loan borrowers …
Debt Yield in Relation to CMBS Loans
When it comes to CMBS loan underwriting, DSCR and LTV aren’t the only factors that a lender considers. Increasing, lenders are looking at a another metric, debt yield, in order to determine whether it’s truly worth appro…
What is a Conduit Loan?
Conduit loans, also known as CMBS loans, are commercial real estate loans that are pooled together with similar commercial mortgages and sold on the secondary market. CMBS loans are known for their relaxed credit require…
Mezzanine Financing in Relation to CMBS Loans
Since CMBS loans typically prohibit second mortgages, many borrowers have turned to mezzanine financing to fill in the gap. Mezzanine financing, unlike a traditional second mortgage, is a hybrid of debt and equity that p…
Who are the Top CMBS Lenders?
If you’re on the market for a conduit loan, you may want to know who the biggest players in the lending game are, in essence, who you might be getting a loan from. In 2017, some of the biggest CMBS lenders in the U.S. in…
Are CMBS Loans Fixed-Rate?
The vast majority of CMBS loans are fixed-rate, however, floating-rate CMBS loans do exist. Despite that, variable-rate CMBS loans are considerably less popular than their fixed-rate counterparts, due to the fact that th…
Are CMBS Loans Fully Amortizing?
The vast majority of CMBS loans are not fully amortizing. Instead, most CMBS loans are partially amortizing, while others have partial-term interest-only periods, or are full-term interest-only loans.
CMBS Loan Rates: What are the Interest Rates for CMBS Loans?
Conduit loan rates are typically based on the U.S. Treasury rate, plus a margin, or spread, designed to compensate the lender/investors for their risk.
Refinancing CMBS Loans: What You Need to Know
Since the vast majority of CMBS loans are not fully amortizing, CMBS borrowers typically face hefty balloon payments when the term of their loan is up. If you’re a CMBS borrower who’s about to face a big balloon payment,…
Are CMBS Loans Non-Recourse?
Fortunately for borrowers, the vast majority of CMBS loans are non-recourse. This means that if a borrower defaults on their loan, the lender cannot attempt to repossess their property in order to get compensation for th…
Rate Locks in Relation to CMBS Loans
Unlike other types of large real estate loans, getting an early or extended rate lock on a CMBS loan is pretty much unheard of. However, many lenders do offer 30-day rate locks on certain CMBS loans in order to make thei…
Debt Service Coverage Ratio (DSCR) in Relation to CMBS Loans
Debt Service Coverage Ratio, or DSCR, is one of the key metrics that lenders use when determining a borrower’s eligibility for a CMBS loan. DSCR can be calculated by dividing a property’s net operating income (NOI), with…
Are CMBS Loans Assumable?
In most cases, CMBS loans are fully assumable, though a small fee must often be paid. This is a huge advantage for CMBS borrowers, since one of the main disadvantages of CMBS financing is the difficulty of exiting the lo…
Buydowns in Relation to CMBS Loans
If you’re a CMBS loan borrower who wants to decrease the interest rate of your loan, you may be able to do so by purchasing an interest rate buydown.
Interest-Only CMBS Loans
If you’re a CMBS loan borrower who wants to maximize cash flow during the duration of your loan term, you may want to consider partial or full-term interest-only CMBS financing. While they might sound like a special bree…
What are the Pros and Cons of CMBS Loans?
Just like any other type of commercial real estate loan, CMBS loans have their fair share of pros and cons. However, it’s important to understand that CMBS financing occupies an incredibly useful niche in the industry, p…
CMBS Loans and Cash-out Refinancing
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 property. Borrowers are typically only limi…
What is a CMBS Loan? Uncovering Hidden Risks and Benefits
CMBS loans, which are also referred to as conduit loans, are a type of real estate loan that’s secured by a first position mortgage on a commercial property.
Loan-to-Value Ratio (LTV) in Relation to CMBS Loans
Loan-to-value ratio, or LTV, is one of the most important metrics that lenders use to determine whether a borrower can qualify for CMBS loan. LTV can be determined by dividing the amount of the loan by the assessed value…
What are CMBS Spreads?
A CMBS credit spread is defined as the difference in yield between a U.S. treasury bond and a specific commercial mortgage backed security.
Prepayment Penalties for CMBS Loans
CMBS loans come with prepayment penalties, typically defeasance or yield maintenance. Find out how each penalty works.
CMBS Loans vs. Agency Loans for Multifamily Financing
When it comes to getting financing for a multifamily property, Fannie Mae and Freddie Mac multifamily loans, also known as agency loans, are some of the most popular options on the market. When compared with CMBS financi…
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