US CMBS LOAN

City Capital Realty

310-714-5616

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CMBS Lenders


Summery

These lenders usually make riskier loans than life companies. Most CMBS lenders bypass requirements of others such as historical operating history or market size. In return for this risk, CMBS loans usually carry higher interest rate. Origination fees are also higher for a CMBS lender because of the complexity involved with these transactions. Their precise underwriting templates usually call for a minimum $5 million loan amount along with heavy reserves for the owner.


PROS & CONS

  • ✓ Higher Loan-to-Values
  • ✓ Bypass Occupancy Issues
  • ✓ Tertiary Markets Lending
  • ✗ Higher Transaction Fees
  • ✗ More Reserves

Background

Because life insurers are able to predict mortality rates, they invest in liquid and illiquid assets. Life insurers have a variety of reasons for investing in commercial mortgage loans. Three primary for investing in mortgages are: (1) increasing asset type diversification, (2) matching long-term assets & liabilities and (3) minimizing credit losses.

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