Non-Recourse Fixed Rates Through the CMBS Market

Commercial mortgage-backed securities provide non-recourse, fixed-rate financing for stabilized commercial properties across every asset class, with underwriting flexibility that portfolio lenders often lack.

How the CMBS Conduit Market Works

CMBS loans are originated by conduit lenders, pooled into securities, and sold to bond investors on the secondary market. Because the risk is distributed across a bond pool rather than held on a single lender's balance sheet, CMBS underwriting can be more flexible than bank lending on property type, borrower profile, and geographic concentration. Loan sizes range from $2M to $500M+, with non-recourse terms, fixed rates for 5 to 10 years, and amortization periods up to 30 years. CapitalAx works with multiple CMBS conduit originators and knows which desks are actively quoting, which are competitive on specific asset classes, and how to structure your deal to clear both the originator's credit committee and the eventual bond rating agency review. CMBS is not the right fit for every deal, but when it fits, it delivers terms that conventional lenders struggle to match.

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: CMBS conduit pricing changes weekly based on bond market conditions and each desk's pipeline capacity. We maintain active relationships with multiple CMBS originators and know which desks are hungry for volume, which are competitive on specific asset types, and when to time your rate lock for optimal execution.
Rating Agency-Ready Deal Packaging: Every CMBS loan must pass a bond rating agency review (Moody's, Fitch, KBRA, or DBRS). We structure deal packages with the documentation, cash flow analysis, and property narratives these agencies require, reducing the back-and-forth that delays closings and risks rate lock expirations.
Post-Closing Servicer Navigation: After a CMBS loan closes, any modification requests go through a master or special servicer, not the original lender. We prepare borrowers for this dynamic, structure loans to minimize the need for post-closing modifications, and provide guidance when servicer interaction becomes necessary.

Frequently Asked Questions

What is a CMBS loan and how does it work?

A CMBS loan is a commercial mortgage that gets pooled with other loans and converted into bonds (securities) sold to investors. The borrower's experience is similar to a conventional mortgage, but because the loan is securitized, the lender can offer non-recourse terms and competitive rates. After closing, the loan is serviced by a master servicer and the borrower makes payments as normal.

What are the drawbacks of CMBS financing?

CMBS loans are less flexible after closing than portfolio loans. Modifications, early payoff, and property changes require working through a special servicer, which can be slow. Prepayment penalties (defeasance or yield maintenance) can be expensive. CMBS works best for borrowers who plan to hold the property through the full loan term.

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

Yes, CMBS lenders finance single-tenant properties, though underwriting focuses heavily on the tenant's credit quality, lease term remaining, and the property's re-tenanting potential. Investment-grade tenants with long-term leases get the most favorable terms.