CMBS are securities backed by longer-term fixed-rate loans, while CRE CLOs are securities backed by shorter-term, transitional financing. Here’s what else you need to know.
CMBS vs. CRE CLOs: What’s The Difference?
CMBS Credit Spreads: What You Need to Know
CMBS credit spreads are defined as the difference between the appropriate swap or Treasury rate and the interest rate of the CMBS loan. CMBS loan pricing is based on the current swap rate or U.S. Treasury rate plus this credit spread, which compensates the lender for the risk of providing the loan to the borrower.
CMBS Primer: The Essentials of CMBS and Conduit Loans
When it comes to getting a CMBS loan for a commercial property, there’s a lot that potential borrowers need to know. In this quick, comprehensive primer, we’ll explain all the basics to help borrowers determine whether getting a CMBS loan is right for them.
CMBS Tranches, Explained
When CMBS loans are pooled together and securitized into commercial mortgage-backed securities, they are split into multiple tranches based on risk and return. CMBS tranches can generally be split into two major categories, investment-grade CMBS and sub-investment-grade CMBS.
What is a CMBS B-piece?
The CMBS B-piece refers to the tranches of commercial mortgage-backed securities rated BB+/Ba1 through B-/B3, providing the highest risks and the highest returns for CMBS investors. If the underlying loans that back a CMBS go into default, the B-piece investors are the last to be paid back, if they get paid back at all.
Are CMBS Loans Assumable?
CMBS loans are generally fully assumable with servicer approval and a small fee. Fees vary but are typically around 1% of the remaining balance of the loan. CMBS loan assumption can be of significant benefit to both the seller of a property and a new borrower, but it isn’t a good idea in all situations.
CMBS vs. RMBS: What's the Difference?
CMBS loans are mortgage-backed securities (MBS) collateralized by loans on commercial properties, while residential mortgage-backed securities (RMBS) are mortgage-backed securities collateralized by loans on residential properties between 1-4 units.