CMBS lending

CMBS loans for stabilized commercial property.

CMBS stands for commercial mortgage-backed securities. A CMBS, or conduit, loan is originated with the expectation that it will be pooled with similar commercial mortgages and securitized, rather than held on the originating lender's balance sheet. For the right property, that structure can mean competitive fixed-rate, non-recourse financing for a long-term hold.

Best fit

Stabilized, income-producing property

CMBS lenders underwrite in-place cash flow, not future upside. Strong candidates usually show consistent occupancy, reliable rental income, durable tenancy, and market fundamentals that support long-term income.

  • Multifamily, retail, industrial, office, hospitality, self-storage, manufactured housing, and mixed-use properties
  • Typically a minimum loan around $2 million, with many conduit lenders preferring $5 million and up
  • Fixed-rate pricing, often benchmarked to Treasury or swap rates plus a lender spread
  • Non-recourse, with standard lender carve-outs, and leverage often capped around 75% loan-to-value
Tradeoffs to know

Less flexible after closing

Once securitized, the borrower usually deals with a servicer, not the original originator, so modifications, consents, and workouts are often less flexible than with a balance-sheet lender.

  • Underwriting typically looks for debt service coverage around 1.25x and debt yield in the 7% to 8% range, varying by property type and market
  • Prepayment can be expensive: defeasance or yield maintenance often applies, instead of a simple payoff
  • Most CMBS loans are assumable with servicer approval, which can matter on a future sale
  • Not ideal for heavy value-add plans, major near-term lease rollover, or a likely sale or refinance before maturity

Floridian Mutual arranges CMBS financing through third-party conduit lenders. We are not a direct lender unless explicitly stated otherwise. Terms, pricing, leverage, recourse, and eligibility vary by lender, property, market, and underwriting, and nothing here is a commitment to lend.

Best fit

Stabilized, income-producing property with consistent occupancy, reliable rental income, durable tenancy, and market fundamentals that support long-term income.

Property types

Multifamily, retail, industrial, office, hospitality, self-storage, manufactured housing, and mixed-use properties.

Structure to understand

Fixed-rate pricing, often benchmarked to Treasury or swap rates plus a lender spread, and non-recourse terms with standard lender carve-outs.

Loan size guideposts

Typically a minimum loan around $2 million, with many conduit lenders preferring $5 million and up. Leverage is often capped around 75% loan-to-value.

Underwriting guideposts

Underwriting typically looks for debt service coverage around 1.25x and debt yield in the 7% to 8% range, varying by property type and market.

Tradeoffs to weigh

After closing you usually deal with a servicer, not the originator. Prepayment often involves defeasance or yield maintenance, and most CMBS loans are assumable with servicer approval.

What to have ready for a CMBS conversation

The property

  • In-place cash flow, occupancy, and tenant and lease rollover details
  • Property type, location, and condition
  • Loan amount, value, and current debt, if any

The plan

  • Sponsor experience, liquidity, and hold plan
  • Whether a long-term hold fits, or a likely sale or refinance before maturity would not
  • Any heavy value-add plans or major near-term lease rollover

Talk through a CMBS deal.

Send the basics and we will tell you plainly whether a conduit loan fits, or a balance-sheet lender would be better.

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