CMBS Loans for Commercial Properties

A CMBS loan, also known as a conduit loan, is a type of commercial real estate loan that is secured by a first position mortgage on a commercial property. Commercial banks, investment banks, and conduit lenders usually offer CMBS loans to CRE investors looking for higher leverage and lower fixed interest rates

CMBS loans are held in a separate trust serving as collateral for a mortgage-backed security. These loans are non-recourse, have a fixed interest rate amortized over 25-30 years, and are offered to income producing properties. CMBS loan amounts are from $2,000,000 and up with leverage up to 75%.  

CMBS loans are available for a variety of property types, including multifamily properties, apartment buildings, office buildings, hotels, retail, industrial, and self-storage properties. 

General CMBS Loan Terms 

  • Loan Size: $2,000,000 and up

  • Loan Term: 5, 7, or 10 year fixed-rate loans

  • Interest Rates: 4.9% (for 10 year fixed)

  • Amortization: 30 years

  • Leverage: 75% Maximum LTV

  • DSCR: 1.25 Minimum

  • Recourse: Non-recourse (with standard carve-outs)

CMBS Loan Cons 

  • Difficulty releasing collateral

  • Expensive to exit (long lock-out periods may require defeasance in order to exit loan early)

  • Reserves required

  • Secondary financing is often prohibited

CMBS Loan Pros

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