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Commercial Mortgage-Backed Securities Basics: Understanding the Structure, Terms, and Lifecycle of a CMBS Loan

Recording of a 60-minute premium CLE video webinar

BARBRI Practice-Ready Webinar

Conducted on Friday, January 31, 2025

Recorded event now available

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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.

Description

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.

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Outline

  1. Overview and history of the CMBS loan market
  2. Different types of CMBS loans and how they differ from other types of commercial real estate loans
  3. CMBS loan structure, lifecycle and participants
  4. Key documentation and loan provisions
  5. Regulatory requirements
  6. Advantages and disadvantages of CMBS loans from the perspective of both borrowers and lenders

Benefits

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?

Faculty

O'Donnell, Siobhan
Siobhan O'Donnell Sachs
Partner
Ballard Spahr

Ms. O'Donnell is Team Leader of the firm’s CMBS Loan Origination Team who focuses her practice in the area of...  |  Read More

Walter, Douglas
Douglas A. Walter
Partner
Frost Brown Todd

Mr. Walter is a member of the firm’s Commercial Mortgage-Backed Securities (CMBS) practice group and a secondary...  |  Read More

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