A few months ago, ValueXpress introduced a “fixed cost” CMBS conduit loan option for loans between $1.5 million and $12 million. “We closed our first loan a few weeks ago and have another three loans in the closing process,” commented Michael Sneden, Executive Vice President at ValueXpress. “Clients are extremely pleased with the process and the lower costs. The first loan closed in 40 days, confirming the ‘streamlined’ process really works!”
The program provides for a fixed fee of $25,000 for all third-party transaction costs, including appraisal, property condition assessment, Phase I environmental and lenders’ legal costs. In addition, loan documents have been shortened, cash management is typically not required, and reserves for tenant improvements and leasing commissions can be waived. Furthermore, loan structure has been eased, creating a more “user-friendly” CMBS conduit loan.
“The CMBS conduit industry has been grappling with higher transaction costs and more restrictive loan structure since the restart of CMBS conduit lending in 2010,” commented Dennis Suh, Senior Vice President at ValueXpress. “The greatest impact is on small balance borrowers who are not used to high transaction costs and complicated loan structure compared with recourse commercial loans from community banks. Now we have lower costs and a friendlier CMBS conduit loan to compete better with local banks.
The program is nationwide and covers all the typical CMBS conduit loan asset classes — office, retail, industrial, multifamily, self_storage, manufactured housing and hospitality. Loan terms are 5, 7, or 10 years, and interest rates are similar to other CMBS conduit loan programs. The maximum loan-to-value is 75%.