Commercial mortgage-backed securities (CMBS) are a major source of financing for commercial real estate. Understanding CMBS loan characteristics helps borrowers navigate this capital source.
CMBS Loan Characteristics
- Non-recourse to borrower (with carve-outs)
- Fixed-rate with interest-only periods available
- Defeasance or yield maintenance prepayment
- Standardized underwriting and documentation
Market Dynamics
CMBS spreads and availability respond to capital markets conditions. Understanding the securitization process helps borrowers time and structure financing efficiently.