ValueXpress has been originating CMBS conduit loans for over 25 years. In that time, we have been a leader in originating loans for newly launched CMBS programs that offer a better value proposition for our clients than existing options. Whenever new programs are developed, we are typically the first to know as ValueXpress is sought out for the quality of loans we deliver to the CMBS and general lending markets.
A number of lenders at the Mortgage Bankers Commercial Real Estate Finance Conference (MBA/CREF) conference this week announced new programs to improve some of the elements that deter CMBS conduit borrowers from pursuing a CMBS conduit loan. While the non-recourse and unrestricted cash-out elements of CMBS conduit loans are very compelling, sometimes these features cannot trump the most mentioned negatives — stiff prepayment penalties with no options, poor servicing with no flexibility to modify loan terms, high transaction costs and burdensome loan structure (such as cash management provisions).
The newly announced programs will include all the benefits of a CMBS conduit loan, including non-recourse and unrestricted cash-out provisions, but will offer step-down prepayment, in-house servicing and lower/fixed transaction costs. Borrowers will essentially have the best of both worlds.
“I have a $3-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.”
For more information on these new programs, contact Michael Sneden at ValueXpress.