CMBS LENDING

We offer $2-5M Initial Funding, with 5, 7, or 10-year terms. Interest rates range between 4-5% as determined by underwriting parameters, with amounts up to 75% LTV.   CMBS loans are used to buy commercial real estate buildings like multifamily living communities, office buildings, or warehouses. The fixed interest rates are generally based on the swap rate plus a spread, or the lender’s profit. CMBS loans typically come with five-, seven-, or ten-year term lengths, however they are amortized over a 25–30-year duration. Because of the loan term and amortization schedule being out of sync, a balloon payment is required to be paid at the end of the term. Alternatively, the outstanding balance can be refinanced.

Our CMBS loans are guided by two underwriting parameters: 1. The debt service coverage ratio (DSCR) 2. The loan to value ratio (LTV)  We consider both parameters in our loan analysis, in conjunction with a predicted 3. debt yield, or the 4. NOI to loan amount ratio of at least 7%. This allows us to determine the maximum amount of the loan we can extend. Borrowers will also need to demonstrate 5. equity of around 30-40%, and a 6. post-closing liquidity of 5% of the total sum, and 7. total net worth equal to a minimum of 25% of the loan. Additional factors that play a role in our underwriting process include expense ratios and vacancies on the market. CMBS Loans come with two types of Prepayment Penalties – yield maintenance and defeasance. For more information or discuss how can help achieve your goals! Schedule a Strategy Session