What is a CMBS Loan?

A Commercial Mortgage Backed Security (CMBS) is a type of security that leverages mortgages on commercial properties as collateral.  Commercial property loans of different sizes, property types, and locations are pooled together and are associated with securities.  The securities are transferred to a trust that takes care of the management details.  The trust then issues bonds to accredited investors.  As interest is paid on the pooled loans, it is distributed to the investors.  Loans that will be pooled into commercial mortgage backed securities are known as CMBS loans.    

CMBS loans (also known as conduit loans) can be a great fit for commercial investors that are looking for a non-recourse financing option or to extract cash from equity in a property.  They typically are about 10 years in term length and are amortized at 25 to 30 years.  The starting point on these types of loans is around $2,000,000. 


When is a CMBS Loan a good option?

  • You need an unrestricted cash-out option that goes up to the maximum LTV
  • You need a non-recourse (no personal guarantees) financing option
  • Your current loan is about to reach maturity and you need to refinance
  • Your property isn't eligible for the Fannie Mae [link] or Freddie Mac [link] multifamily programs


Vista Commercial Capital can help you with your CMBS Loan needs

If you have an opportunity that you'd like to review with us where a CMBS loan might be a good fit, we'd be happy to set up some time to have a discussion.