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 non-traded, private REITs, depending on the individual company. CMBS loans and REITs have a complex relationship; on one hand, traditional REITs use CMBS loans to finance their property investments, while certain mortgage REITs originate or purchase commercial loans in order to generate profits for investors.