Borrowers Get Upper Hand With Floating-Rate CMBS Loans

By Andrew McIntyre (March 26, 2015, 4:49 PM EDT) -- As commercial mortgage-backed securities lending gains momentum and more and more lenders compete for business, borrowers continue to have the upper hand and are starting to negotiate relatively small-figure floating-rate loans — highly leveraged, flexible, nonrecourse loans that since the crash have seldom been offered at the $2 million threshold they're often available for now.

CMBS nosedived from $225 billion in issuance in 2007 to less than $3 billion by 2009, but since then, they have begun to recover and are expected to easily surpass $100 billion this year.

Over the past several years, the securities have largely been in the...

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