CMBS (conduit) commercial mortgages

A CMBS loan is a fixed-rate, non-recourse loan that the lender sells into a pool with dozens of other loans, which is then carved into bonds. The structure gives you full proceeds for the property’s income without a personal guarantee, and takes away almost all flexibility after closing. On Northmarq’s October 21, 2026 sheet, conduit loans at 65% loan-to-value priced 175 to 250 bps over the matching Treasury.

What 2026 conduit loans actually look like

There’s no CMBS rulebook that sets loan limits; bond buyers and rating agencies do it indirectly. The cleanest public evidence is the deal filings themselves. The BMO 2026-C14 collateral term sheet, filed with the SEC in January 2026, describes a $631.6 million pool with these weighted averages:

Metric	BMO 2026-C14 pool
Loan-to-value at cut-off	58.5%
Loan-to-value at maturity	54.6%
Underwritten NCF DSCR	1.73x
Underwritten NOI debt yield	12.7%

Those averages are where this site’s loan sizer starts CMBS loans. CMBS lenders lean on debt yield: a conduit lender will often cap your loan at whatever amount gives a minimum debt yield, regardless of rate, so a 10% debt yield floor on $650,000 of NOI caps the loan at $6.5 million even if the DSCR test would allow more.

Why borrowers still choose it

CMBS lenders underwrite the property’s income more than the sponsor’s balance sheet, so they’ll quote property in secondary markets and property types that life companies avoid, hotels included. Because it’s hard to prepay, it suits owners who plan to hold through the term, not sell.

CMBS is a smaller share of the market than it was. CBRE says CMBS lenders accounted for 11% of the non-agency loans it originated or brokered in Q2 2026, down from 19% a year earlier.

The parts that cost money later

Prepayment. Most conduit loans are locked out at first, then allow defeasance. The REMIC tax rules that CMBS trusts operate under say a lien can be released in exchange for government securities only if the release “is not within 2 years of the startup day” (26 CFR 1.860G-2(a)(8)). After that, defeasance means buying a portfolio of Treasuries that replaces every remaining payment. When rates have risen since you closed, that can cost less than the loan balance; when they’ve fallen, it can cost a lot more.

Servicing. After closing, a master servicer collects payments and a special servicer takes over if the loan gets into trouble. Neither one made your loan, and neither can agree to much without going through the pooling agreement. Small requests, like a lease approval or a partial release, take weeks and carry fees.

Reserves and cash management. Expect tax, insurance and replacement reserves at closing, and a lockbox that sweeps cash if coverage drops below a trigger.

If you think you’ll sell or refinance inside the term, compare a bank loan or a floating-rate bridge loan before you commit.