CMBS and Conduit Loan Terms
CMBS loans typically offer fixed-rate terms between 5 - 10 years, with amortizations between 25 - 30 years. At the term's end, a balloon payment is usually paid, or the loan is refinanced.
CMBS Loans Explained
CMBS loans are a type of commercial real estate financing that is provided by lenders, pooled into groups of other loans in a process known as securitization, and sold on the secondary market to investors. CMBS loans, which are also known as conduit loans, can provide borrowers with low-interest, high-leverage financing without incredibly high credit or net worth requirements.
CMBS Loan Terms and Property Types
At CMBS.Loans, we have nearly two decades of expertise in arranging CMBS and conduit financing for a variety of property types, including apartments, office buildings, mixed-use buildings, mobile home parks, self-storage facilities, industrial properties, and much, much more. While CMBS loan terms can vary significantly according factors to including property type, property quality and condition, property location, and tenant quality, we’ve provided a list of standard conduit loan terms that represent a good snapshot of what you, the borrower, can expect from a CMBS loan.
Standard CMBS loan terms for income-producing commercial properties typically include:
Loan Size: $2 million minimum, no maximum
Loan Terms: 5-10 year fixed-rate terms with amortizations of 25-30 years
Eligible Properties: Varies by property type
Leverage:
Pricing: Typically based on LTV and DSCR, rate buydowns are sometimes available
Assumability: CMBS loans are typically fully assumable, though a fee may apply
Prepayment Penalties: Defeasance or yield maintenance
Recourse: Typically non-recourse with standard bad-boy carveouts
Appraisals: Required, to be paid for by the borrower