CMBS Loans for Commercial Real Estate
Non-recourse financing for stabilized commercial properties—competitive rates with flexible structures.
Institutional-Grade Financing Without Personal Guarantees
For investors with stabilized, income-producing commercial real estate, CMBS (Commercial Mortgage-Backed Securities) loans offer a compelling combination: competitive fixed rates, non-recourse structures, and loan terms that match long-term hold strategies.
Unlike bank loans that sit on a single lender's balance sheet, CMBS loans are pooled and sold to investors in the secondary market. This securitization model allows lenders to offer aggressive terms while removing personal liability from most borrowers.
Brookmont Capital Ventures helps commercial property owners access CMBS financing, navigating the underwriting process and negotiating terms that protect your interests.
CMBS Loan Characteristics
Non-Recourse Structure
The defining feature of CMBS loans: no personal guarantee required (with standard "bad boy" carve-outs for fraud, misrepresentation, and other borrower misconduct). Your liability is limited to the property itself.
Fixed Interest Rates
Lock in predictable debt service with fixed rates for the full loan term—typically 5, 7, or 10 years.
Higher Leverage
CMBS lenders often offer more aggressive leverage than banks or life companies, with loan-to-value ratios up to 75%.
Assumable Loans
CMBS loans can typically be assumed by a qualified buyer, making your property more attractive at sale and potentially commanding a premium price.
Interest-Only Options
Many CMBS loans offer partial or full-term interest-only periods, maximizing cash flow during the hold period.
Typical CMBS Loan Terms
| Parameter | Typical Range |
|---|---|
| Loan Amount | $2M – $100M+ |
| Loan-to-Value | 65-75% |
| Debt Service Coverage | 1.25 – 1.35 minimum |
| Term | 5, 7, or 10 years |
| Amortization | 25-30 years (or interest-only) |
| Interest Rate | Fixed for term |
| Recourse | Non-recourse with carve-outs |
| Prepayment | Yield maintenance or defeasance |
*Terms vary based on property type, location, and market conditions.
Property Types
CMBS financing is available for most stabilized commercial property types:
- Multifamily – Apartments, student housing, senior living
- Retail – Anchored centers, single-tenant, neighborhood retail
- Office – Suburban and CBD office buildings
- Industrial – Warehouse, distribution, manufacturing
- Hospitality – Full-service and select-service hotels
- Self-Storage – Stabilized facilities with proven occupancy
- Mixed-Use – Properties with multiple income-producing uses
Properties should be stabilized with consistent occupancy and cash flow history.
CMBS vs. Other Financing Options
| Factor | CMBS | Bank Loan | Life Company |
|---|---|---|---|
| Recourse | Non-recourse | Usually recourse | Non-recourse |
| Max LTV | 75% | 65-70% | 60-65% |
| Rate | Competitive fixed | Variable or fixed | Lowest fixed |
| Flexibility | Limited | High | Moderate |
| Prepayment | Yield maintenance/defeasance | Often flexible | Yield maintenance |
| Approval Difficulty | Moderate | Moderate | High |
Choose CMBS when:
- Non-recourse is important to you
- You want competitive leverage (70-75% LTV)
- You plan to hold for the full term or sell with loan assumption
- The property is stabilized with strong cash flow
CMBS Loan Considerations
Prepayment Structure – CMBS loans typically require yield maintenance or defeasance to prepay before maturity. This can be costly if you need to sell or refinance early. Understand the prepayment terms before committing.
Servicing Structure – Unlike bank loans where your relationship manager handles everything, CMBS loans are managed by a master servicer for routine matters and a special servicer if issues arise. This can feel less personal but is manageable with proper expectations.
Reserves and Escrows – CMBS lenders typically require monthly escrows for taxes, insurance, and replacement reserves. Budget for these in your cash flow analysis.
Reporting Requirements – Expect quarterly or annual financial reporting, rent roll updates, and property inspection requirements throughout the loan term.
Ideal CMBS Candidates
CMBS financing works best for:
- Stabilized properties with 85%+ occupancy and consistent NOI
- Experienced sponsors with commercial real estate track records
- Long-term holds where prepayment penalties aren't a concern
- Properties in established markets with institutional investor appeal
- Borrowers seeking non-recourse to limit personal liability
CMBS may not be ideal for:
- Properties requiring significant capital improvements
- Transitional assets in lease-up or repositioning (consider bridge financing instead)
- Borrowers who may need to sell or refinance within 3-5 years
- Deals requiring flexible lender modifications
Our CMBS Advisory Process
Property Evaluation
We analyze your property's financials, tenancy, and market position to determine CMBS eligibility and likely terms.
Lender Selection
We identify CMBS lenders actively quoting your property type and size, targeting those offering the most competitive terms.
Application and Underwriting
We help prepare your loan package and coordinate the underwriting process, including appraisal, environmental reports, and property condition assessments.
Term Negotiation
We advocate for borrower-friendly provisions including reserve structures, cash management terms, and prepayment flexibility where available.
Closing and Securitization
We guide you through closing and the subsequent securitization process, ensuring a smooth transition to permanent servicing.
Why Work With Brookmont
CMBS Market Knowledge – We track which lenders are actively quoting, their current pricing, and their appetite for specific property types and markets.
Underwriting Expertise – CMBS underwriting is highly standardized. We know what lenders need and help you present your property in the best light.
Term Sheet Comparison – We solicit multiple quotes and help you evaluate not just rate, but the full picture: reserves, cash management, prepayment, and borrower protections.
Closing Coordination – CMBS closings involve multiple parties. We keep the process on track and resolve issues as they arise.
Ready to Explore CMBS Financing?
If you own stabilized commercial real estate and want competitive, non-recourse financing, CMBS may be the right solution. Brookmont Capital Ventures can help you evaluate your options and secure optimal terms.
Questions? Contact our team at info@brookmontcapital.net
Brookmont Capital Ventures is a capital advisory firm. We do not provide direct lending services. All financing is subject to lender approval and underwriting.