CMBS / Conduit

Commercial Mortgage-Backed Securities, or CMBS, have made a comeback in the past few years as the economy has bounced back from a near total collapse in 2007-2008.  Commercial mortgage-backed securities are simply large loans or packages of smaller ones converted to bondlike instruments and sold off in pieces.  Many larger self-storage facility transactions are done via CMBS financing.

The advantages of CMBS loans are that it is usually fixed rate financing, is usually non-recourse and is usually assumable at the discretion of the lender.   You also will not need to have some sort of depository relationship with a local bank which gives you more autonomy from the lenders.

The disadvantages of CMBS loans are less flexibility to deviate from the loan, difficulty in releasing collateral if additional collateral has been pledged, lock-out periods and pre-pay penalties

The following terms are general guidelines for CMBS pricing. These are priced at competitive spreads over the corresponding U.S. Treasury rates.

Loan Amounts:                $2,000,000 – $50,000,000

Loan Terms:                    5,7, 10, 15 years

Amortization:                   30 Years maximum

Loan To Value:                 75% Maximum

Assumable:                     Yes

Non-Recourse:                Yes

Prepayment:                    Yield maintenance or defeasance

Cash Out:                        Permitted

Rate Lock:                       Rate is locked at least 24 hours prior to funding.

Rates:                              5 Year  3.78%, 10 Year 4.52%, 15 Year Inquire

Keep in mind, these are GENERAL guidelines.  Rate and terms can be more or less competitive based on desirability of the transaction and / or the borrower.

To pre-qualify for financing, download the following forms and provide the following information:

  1. Loan Application  (pdf)  (Word) or Apply Online
  2. Personal Financial Statement  (pdf)  (Word)
  3. Resume  (pdf)  (Word)
  4. 2013 Year End Business Financials
  5. 2014 Year-To-Date Business Financials

This is a general guideline for documents normally needed depending on the type of financing being applied for.