Key Takeaways
- CMBS origination: 60-90 days; warehouse: 60-120 days; total securitization: 4-7 months.
- Dodd-Frank requires 5% risk retention in CMBS; SEC registration governs public REITs.
- CMBS workouts: A/B note splits, extensions, discounted payoffs—all must pass NPV test.
- Institutional herding and the denominator effect create contrarian buying opportunities.
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Test Your Knowledge
1.What triggers a CMBS loan transfer to special servicing?
2.What percentage of credit risk must CMBS sponsors retain under Dodd-Frank?
3.What is the denominator effect?
4.What is the Section 199A benefit for REIT investors?