Commercial Mortgage-Backed Securities Basics: Understanding the Structure, Terms, and Lifecycle of a CMBS Loan
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Beginner
- work Practice Area
Real Property - Transactions
- event Date
Friday, January 31, 2025
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
60 minutes
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This 60-minute webinar is eligible in most states for 1.0 CLE credits.
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This CLE webinar will provide an overview and introduction to commercial mortgage-backed securities (CMBS) loans and examine how CMBS loans differ from other types of commercial real estate loans. The panel will discuss the structure, characteristics, terms, and lifecycle of CMBS loans as well as the legal documents associated with these types of loans.
Ms. O'Donnell is Team Leader of the firm’s CMBS Loan Origination Team who focuses her practice in the area of commercial real estate finance. She represents investment banks, commercial banks, specialty finance companies, and institutional lenders, as well as real estate developers and owners, in a variety of real estate financing transactions. Ms. O'Donnell represents clients in permanent and bridge loan origination, CMBS conduit loans, construction loans, preferred equity transactions, mezzanine loans, and other subordinate financing structures. She also has significant experience in other aspects of real estate transactions, including leasing and acquisitions and dispositions of real estate.
Mr. Walter is a member of the firm’s Commercial Mortgage-Backed Securities (CMBS) practice group and a secondary member of the Real Estate practice group. He focuses on representing lenders in complex real estate transactions nationwide. Mr. Walter leads a skilled team of attorneys and other legal professionals within the CMBS practice group. His transactional experience includes mortgage and mezzanine loans secured by all major commercial asset classes, and includes stabilized and construction deals.
CMBS loans are a type of real estate loan that has a first position mortgage secured on commercial rather than residential real estate and they are typically offered by commercial banks, conduit lenders, or investment banks at relatively low fixed interest rates. CMBS are bonds and the mortgage loans that are pooled to form a single commercial mortgage-backed security act as the collateral in the event of default, with principal and interest passed on to investors.
Some common features of CMBS loans include fixed terms of five to 10 years, with amortizations typically between 25 and 30 years. CMBS loans are usually more flexible than other types of loans typically offered by agency lenders and they can be used to finance various types of commercial properties, including retail, office, and mixed-use properties.
CMBS loans are complex transactions with several participants, including the originator, underwriter, a master servicer, a special servicer, investors, trustees, and rating agencies. Each of these participants plays a particular role in the transaction and their role is defined in the loan documentation that accompanies the transaction.
Listen as our authoritative panel discusses how CMBS loans work, the advantages and disadvantages of these types of loans, and deal characteristics with respect to loan size, interest rate, collateral type, and key loan document provisions. The panel will also discuss structuring CMBS loans from the perspectives of both the lender and the borrower.
I. Overview and history of the CMBS loan market
II. Different types of CMBS loans and how they differ from other types of commercial real estate loans
III. CMBS loan structure, lifecycle, and participants
IV. Key documentation and loan provisions
V. Regulatory requirements
VI. Advantages and disadvantages of CMBS loans from the perspective of both borrowers and lenders
The panel will review these and other key considerations:
- What are CMBS loans and how are they different from other types of commercial real estate loans?
- How are CMBS loans typically structured and what are some of the key loan document provisions?
- What are the advantages and disadvantages of CMBS loans from the perspective of both borrowers and lenders?
- What are the typical deal characteristics of a CMBS loan?
- Who are the participants in a CMBS loan and what role do they play over the lifecycle of the loan?
