COMMERCIAL MORTGAGE BACKED SECURITY FINANCING (CMBS)

 

Are you in search of the best financing for commercial mortgage-backed securities (CMBS)? CMBS, a type of bond, is backed by mortgages on commercial real estate rather than residential properties. These bonds are typically issued in multiple tranches, similar to collateralized mortgage obligations, rather than as typical residential pass-throughs.

American commercial mortgage-backed securities carry fewer prepayment risks compared to other mortgage-backed securities. Most commercial mortgages include lockout provisions that may involve prepayment penalties, yield maintenance, and defeasance to protect bondholders. Simply put, commercial real estate first mortgage debt is usually categorized into two types: loans to be securitized, known as CMBS loans, and portfolio loans. Portfolio loans are those originated by a lender and held on its balance sheet until maturity.

CMBS transactions are structured and priced based on the assumption that they will not be subject to tax. Compared to residential mortgage-backed securities, CMBS loans have a lower degree of prepayment risk because commercial mortgage rates are typically fixed-term. These bonds have become an attractive capital source for commercial mortgage lending, as they are supported by a pool of loans generally valued higher than the total value of the individual loans.

Since 1977, Ocean Pacific Capital has assisted hundreds of real estate developers and investors in securing the best CMBS financing. Let our experience and expertise help you obtain the financing you need. Contact us via email or phone to see how we can assist you.

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