Commercial Mortgage Backed Securities
For loans that do not fit in the "agency box," or that require a faster closing process with less red tape and more focus on property income than the borrower or the curb-appeal of the multifamily project, CMBS financing is the perfect fit. Rates are aggressive, leverage is reasonable, and the process is much more income focused. CMBS loans are available for most commercial properties including office buildings, retail centers, apartment buildings, industrial properties, and more.
Sample CMBS Terms For Apartment and Commercial Property Loans
Size: $3 million and up
Term: 5, 7, and 10 year fixed
Interest Rates: 4.90% (on the 10 year)
Starting at 200bps over relative treasury
Amortization: 30 years
Maximum LTV: 75%
Minimum DSCR: 1.25
Minimum Debt Yield: 8.7%
Reserves: Taxes, insurance, replacement reserve and leasing costs
Prepayment: Defeasance or yield maintenance
Property Types: Multifamily
- Attractive fixed rates for long term loans.
- Can go up to 75% LTV.
- Wide range of loan size.
- Will consider non-Class “A” assets.
- Provides cash out refinancing.
- Less autonomy in the operation of the property and limited flexibility to deviate from the terms of the loan documents.
- Difficulty in releasing collateral.
- Expensive to exit.
- Reserves required.