Example CMBS Terms for Apartment & Commercial Property Loans

Size: Typically,$2 million, and up
Term: 5, 7, and 10 year fixed

Interest Rates: Typically based on a margin (~200bps) over the swap rate
‍Amortization: 25 to 30 years
‍Maximum LTV: Up to 75%
‍Minimum DSCR: From 1.25x+

Advantages

• Non-recourse
• Attractive fixed rates
• Up to 75% LTV
• Will consider non-Class “A” assets
• Less scrutiny for borrowers
• Provides cash-out refinancing
• Loans are fully assumable
• Can be combined with mezzanine debt or preferred equity in many scenarios

Disadvantages

• Limited flexibility to deviate from the terms of the loan documents
• Difficulty in releasing collateral
• Can be expensive to exit (prepayment penalty, defeasance, or yield maintenance)
• Lock outs often prevent prepayment for 2+ years
• Reserves required