ValueXpress has been originating CMBS conduit loans for over 25 years. We are a leader in originating loans for newly launched CMBS programs that offer a better value proposition for our clients than existing options. When new programs are developed, we are the first to know as ValueXpress is sought out for the quality of loans we deliver to the CMBS and general lending markets.
One program that clients use extensively is the “step-down” prepayment penalty program. The program was temporarily sidelined during COVID-19, but it is now open for business. Essentially, the program is a CMBS loan with a flexible prepayment penalty (currently 4% declining – 4% in year 1, 3% in year 2, 2% in year 3 and 1% in year 4). In addition, the loans are serviced “in house” as opposed to the typical Master/Special servicers in CMBS. Below is a snapshot of loan parameters:
“I have a $5-million loan with a typical CMBS term sheet, but the sponsor refuses to accept yield maintenance or Treasury Defeasance,” commented Michael Sneden, Executive Vice President at ValueXpress. “So, we are going to close it in one of the new programs with CMBS terms and a step-down prepay, with a 25-basis-point rate premium that is acceptable to our borrower.”