Using CMBS Loans for Major CRE Acquisitions

Commercial real estate investors: did you know that CMBS loans can be used to finance major property acquisitions – such as franchised hotels, multifamily housing, hospitals, and shopping centers? When the market crashed a few years back these loans were virtually untouchable, but my oh my have things changed. Even though they have become much easier to obtain, and have grown in popularity, many investors still don’t understand exactly what CMBS loans are and how they differ from other types of financing.

How CMBS Loans Work

CMBS loans (short for Commercial Mortgage Backed Securities loans) are comprised of commercial properties which are pooled and then placed into a trust fund. Once in the trust, bonds are issued and sold to CRE investors. Because CMBS loan amounts start at $5 million and up, not all traditional lenders have the resources to cover the request, and those that do are hesitant to take a chance on independent commercial real estate projects. Fortunately, the world of commercial finance has stepped up to meet the challenges facing those in need of CMBS loans by offering efficient solutions to get VRE investors the funding they need, quickly and efficiently.

The Benefits of CMBS Conduit Loans

Most commercial mortgage backed securities loans are not weighed against the financial history of a specific property, or its given market size, because the collateral of the investment is directly tied to existing properties in the trust. Because of this, there is less perceived risk for investments in tertiary markets, such as non-profits and service industries, and CMBS loans have a fantastic reputation for LTV performance due to existing properties already backing the issued bonds. A CMBS loan is typically considered a low-risk investment over other types of financing, due to competitive rates, full amortization, and the option to cash out.

Davis Commercial Finance has the capital resources to offer CMBS loans to commercial real estate investors. If you are looking at a major CRE acquisition and are running into denials due to the limitations of traditional lenders, call our offices at 916-412-5577. We specialize in getting investors the funding they need for real estate acquisitions and property development projects of all sizes.


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