CMBS Rates

Mezzanine Financing in Relation to CMBS Loans

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 permits the lender to convert their debt into shares in the borrower’s company in the case of a loan default.

CMBS Loan Rates: What are the Interest Rates for CMBS 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. As of October 2018, the 10-year U.S. Treasury rate was 3.18%, so, for example, if the margin on a CMBS loan was 2%, the interest rate would be approximately 5.18%. CMBS loan spreads are influenced by a variety of factor