Chapter 16: Commercial Mortgage-Backed Securities (CMBS)

In this section

• CMBS Structures and Call Protection
  Explore the securitization process of commercial mortgages, the role of SPVs and various call protection mechanisms that safeguard CMBS investors against early prepayment risk.
• Balloon Risk and Prepayment Lockouts
  Learn about the final large principal payments in commercial mortgage-backed securities, why shorter-term maturities are common, and how lockout provisions shape cash flow stability and risk analysis.
• Analyzing Property-Based Cash Flows
  Explore how property-specific factors, market conditions, and specialized servicing roles affect commercial mortgage-backed securities cash flow analysis. Learn to project NOI, apply cap rates, and stress-test scenarios for robust CMBS evaluations.
• Vignette: CMBS Features and Underwriting
  Explore a realistic CMBS transaction with multiple properties, tranching, call protection, and underwriting challenges, complete with scenarios and item-set style questions.