Non-Recourse Fixed Rates Through the CMBS Market

Non-Recourse Fixed Rates Through the CMBS Market

CMBS financing brings non-recourse, fixed-rate debt to stabilized properties in every asset class, with underwriting flexibility that most portfolio lenders can't match.

Non-Recourse Fixed Rates Through the CMBS Market

CMBS financing brings non-recourse, fixed-rate debt to stabilized properties in every asset class, with underwriting flexibility that most portfolio lenders can't match.

How the CMBS Conduit Market Works

Here is how CMBS works: a conduit lender originates your loan, pools it with others into a security, and sells that security to bond investors. Since the risk spreads across the bond pool instead of sitting on one lender's balance sheet, the underwriting bends further than a bank would on property type, borrower profile, and geographic concentration. Loans run from $2M to $500M+, non-recourse, with fixed rates for 5 to 10 years and amortization out to 30. We work with a range of conduit originators and track which desks are quoting, which are aggressive on a given asset class, and how to build a file that clears both the originator's credit committee and the rating agency review that follows. CMBS is not right for every deal. When it fits, though, few conventional lenders can touch the terms.

Key Terms

Loan Range: $2M to $500M+
Terms: 5, 7, or 10 years
LTV: Up to 75%
Amortization: 25 to 30 years
Recourse: Non-recourse
Prepayment: Defeasance or yield maintenance

Who Is It For

  • Commercial property owners seeking non-recourse permanent financing
  • Investors with stabilized assets across any commercial property type
  • Borrowers who need higher leverage than banks typically offer
  • Property owners with complex ownership structures or entities
  • Investors seeking long-term fixed rates without personal guarantees

Common Use Cases

  • Acquisition financing for stabilized commercial properties
  • Refinancing maturing debt on income-producing assets
  • Cash-out refinance on appreciated commercial properties
  • Large single-asset or portfolio transactions
  • Properties that don't fit traditional bank lending criteria

Borrower Scenarios

  • A REIT acquiring a 180,000 sq ft Class A office building for $28M, placing a 10-year CMBS loan at 65% LTV with a 30-year amortization, non-recourse terms, and a defeasance prepayment structure that allowed early exit if the sponsor decided to sell into a favorable market.
  • A retail center owner refinancing a $14M maturing bank loan into CMBS, obtaining a 7-year fixed rate 60 basis points below the renewal offer from the existing lender, with non-recourse terms the bank refused to provide and a 25-year amortization that reduced annual debt service by $92K.
  • An industrial portfolio owner consolidating three warehouse properties into a single $22M CMBS facility, simplifying reporting and payments while accessing leverage and terms that no single bank would offer on a cross-collateralized portfolio of that size.
  • A hotel investor refinancing a 220-key flagged property out of a bridge loan into a $16.5M CMBS permanent facility with a 10-year term, locking in a fixed rate after completing a $2.1M PIP renovation that increased the property's appraised value by 30%.

Why CapitalAx

Active Relationships With Multiple CMBS Conduits: Conduit pricing moves week to week with the bond market and each desk's pipeline. We stay close to a range of CMBS originators, so we know which desks are hungry for volume, which are strong on your asset type, and when to time the rate lock for the best execution.
Rating Agency-Ready Deal Packaging: Every CMBS loan has to survive a rating agency review from Moody's, Fitch, KBRA, or DBRS. We build the file the way those agencies want it, with the documentation, cash flow analysis, and property narrative they expect, which cuts the back-and-forth that stalls closings and puts rate locks at risk.
Post-Closing Servicer Navigation: Once a CMBS loan closes, you deal with a master or special servicer for any change, not the lender who originated it. We prep borrowers for that reality up front, structure the loan to avoid the need for modifications later, and step in to guide you when servicer contact becomes unavoidable.

Frequently Asked Questions

What is a CMBS loan and how does it work?

A CMBS loan is a commercial mortgage that gets bundled with other loans and turned into bonds sold to investors. Day to day, it feels a lot like any conventional mortgage. The difference is that securitization lets the lender offer non-recourse terms and sharp rates. Once you close, a master servicer handles the loan and you simply make your payments as usual.

What are the drawbacks of CMBS financing?

The tradeoff comes after closing. CMBS gives you far less flexibility than a portfolio loan, since any modification, early payoff, or property change runs through a special servicer, and that process can crawl. Prepayment through defeasance or yield maintenance gets expensive too. This financing rewards borrowers who intend to hold the property for the full term.

Can I get a CMBS loan on a single-tenant property?

Yes. CMBS lenders do finance single-tenant buildings, but the underwriting leans hard on the tenant's credit, how much lease term is left, and how easily the space could be re-tenanted. An investment-grade tenant on a long lease will get you the best terms.