CMBS lenders provide financing for commercial properties by pooling loans into mortgage-backed securities, offering investors long-term, fixed-rate solutions.
At Clopton Capital, we’re proud to offer access to the most trusted CMBS lenders in the industry. CMBS loans, or commercial mortgage-backed securities, are a powerful tool in the world of commercial lending that provide a wide range of benefits to borrowers.
What exactly are CMBS loans, how do they work, and what do you need to know about CMBS lenders? We’ve created this page to provide you with all the answers to the most common questions we receive about CMBS lenders.
Looking for a CMBS loan quote? Contact us today to receive your free quote and begin the process of obtaining a CMBS loan from our trusted network of top CMBS lenders.
Still want to learn more? Read on.
CMBS lenders and CMBS agency organizations range across many different entities, from major investment banks to smaller but well-respected names you may not have heard before. The top CMBS lenders list includes JP Morgan, Deutsche Bank, Goldman Sachs, and Wells Fargo. As of 2018, these five CMBS lenders accounted for roughly 50% of CMBS loan market share.
That said, you can also find CMBS loans from other sources on the CMBS market, many with beneficial loan terms you won’t find anywhere else. That’s why Clopton Capital is such an indispensable partner in managing the CMBS market — we’ll help you find the best lender with the best terms for your needs. We also help make the CMBS issuance process as simple and straightforward as possible.
While researching CMBS loans, you might have come across the term ‘conduit lender.’ What does this mean? Are conduit lenders different from CMBS lenders, and what does that mean for you? It can be confusing, but conduit lenders and CMBS lenders are one and the same. CMBS loans are also known as conduit loans, because they serve as a conduit from the loan originator to the investors that ultimately buy those loans.
So if you ever see the phrase ‘conduit loan’ or ‘conduit lender,’ just assume that they can be used interchangeably with the terms ‘CMBS loan,’ ‘commercial mortgage-backed security loan,’ or ‘CMBS lender.’
Wondering about the CMBS loan pros and cons? CMBS loans from trusted lenders can be ideal for anyone looking to borrow with a less-than-perfect financial history. Because CMBS issuance is often based on assets, the financial history of the borrower isn’t as central to underwriting as other factors. So if you have big plans but less-than-perfect credit, CMBS loans can be a great option for you.
Plus, we already mentioned the added benefit of CMBS loans being fully assumable, which means that you can offer the attractive feature of an already-set loan in place for a buyer.
If traditional loan lenders earn a profit based on the interest paid by the borrower over the course of the loan, then how do CMBS lenders make money if they’re selling off loans they originate in bulk before they can mature?
Here’s how it works. CMBS lenders are essentially wholesalers, benefitting from what the retail industry would call a bulk discount. They originate loans at a certain interest rate, then sell them later at a different interest rate thanks to the bulk package they provide through their bonds.
It’s important to understand this process as a borrower only because it means that you won’t be working with your original lender after the loan has been sold in a bond. You’ll be interacting regularly with a CMBS servicer, sometimes known as a master servicer. They’ll handle any ongoing maintenance of your loan, such as payments, escrow, and more.
Which CMBS lender you choose will generally depend on the type of project you’re looking to fund. You may select a different lender if you’re looking to finance a hotel purchase versus a multifamily housing development or an office.
While the types of CMBS lenders can vary, they most frequently fall into one of two categories — CMBS hotel lenders and CMBS multifamily lenders. Their differences mainly come from the types of loans they manage, from commercial mortgage loans to construction loans, but there are some other key distinctions that you’ll want to be aware of as well. Here’s everything you need to know about hotel lenders versus multifamily loans when it comes to CMBS loans.
Looking for a commercial loan for a hotel, resort, or other form of short-term vacation housing? A CMBS loan may be the perfect option. Both well-known and smaller CMBS lenders offer loans for hotels and hospitality companies that can bring major benefits. From acquiring new properties to refinancing, CMBS financing provides tons of benefits that we’ve already outlined in general above which become even more beneficial when considering hotel funding. In particular, the fact that the loans are fully assumable is a major plus in an industry where sales to new owners are common.
Investors looking to finance a multifamily housing development, such as an apartment building or condo complex, will benefit from a CMBS multifamily lender. These companies are experienced at offering financing through CMBS loans for multifamily housing purchases, so they’ll have all the expertise you need to make the process simple, straightforward, and with as beneficial loan terms for your needs as possible.
Generally, CMBS loans for multifamily properties provide all the benefits you’d expect — flexible underwriting, fully assumable loans, and more.
Wondering who is at the top of the industry when it comes to CMBS lenders? While there are plenty of smaller organizations offering CMBS loans with beneficial rates, the industry is largely dominated by a core group of well-known names. In fact, just five lenders make up for roughly 50% of all CMBS loan market share.
Here they are in order of market share, according to data from 2018 — the most recent year information is available.
Are you ready to get a CMBS loan and fund your commercial property investment dreams? Contact Clopton Capital today to get a free quote from our network of the most trusted CMBS lenders in the industry. Don’t wait another moment before making your goals a reality. Call us today.
Access a nationwide network of trusted CMBS lenders to secure competitive financing for your commercial real estate investments. Contact Clopton at 866-647-1650.
A CMBS lender is a financial institution or investment bank that originates Commercial Mortgage-Backed Securities (CMBS) loans. These loans are then pooled and securitized into bonds that are sold to investors, providing capital for income-producing commercial properties.
Unlike traditional banks, CMBS lenders typically package loans into securities for sale to investors. This allows lenders to fund larger commercial real estate projects while transferring some risk to the secondary market.
Eligible properties include:
Office buildings
Retail centers
Industrial warehouses
Multifamily apartments
Hotels
Mixed-use commercial properties
You can submit your project details, including property type, loan amount, and financials. Experienced brokers, like Clopton Capital, then connect you with lenders that best match your needs and offer competitive terms.
