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 generally 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.
Deal Structure at a Glance
Who Is This 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
Examples of how this financing can be used.
A REIT acquiring a 180,000 sq ft Class A office building, placing a 10 year CMBS loan 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 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 meaningfully reduced annual debt service.
An industrial portfolio owner consolidating three warehouse properties into a single 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 CMBS permanent facility with a 10 year term, locking in a fixed rate after completing a brand mandated PIP renovation that materially increased the property's appraised value.
Why Work With CapitalAx
We help borrowers organize cmbs loans requests and compare lending sources that may fit the transaction.
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.
Tools & Calculators
Commercial Real Estate Cap Rate Calculator
Calculate commercial real estate cap rate from NOI and property value to evaluate investment returns.
Commercial Property Value Calculator
Use a commercial property valuation calculator to estimate income based value from NOI and cap rate.
Debt Yield Calculator
Calculate debt yield from NOI and loan amount, and see the maximum loan a lender's debt yield floor allows.
Commercial Refinance Proceeds Calculator
Compare modeled loan limits and subtract payoff and costs to estimate cash out or an equity shortfall.
Related Loan Programs
Looking for a different financing structure? Browse all loan programs.