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.
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 breed of CMBS loan, interest-only CMBS loans are actually incredibly common; over 50% of CMBS loan transaction in 2018 were interest-only.
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— providing a reliable source of low interest rate financing to borrowers who otherwise might not qualify.
CMBS Loans Explained: What is a CMBS Loan?
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.