The good: 70% of CMBS loan maturities should be in a position to pay off at loan maturity.
The bad: 30% of CMBS loan maturities will likely not be in a position to pay off at loan maturity because of high loan to value ratios.
The ugly: If you are in the 70% category above, paying your CMBS loan off can very much feel like you are speeding through an intersection and you realize at the last minute that your light is red and there is on coming traffic. Depending on your driving skills, you may likely be hit. That is, hit with a late fee on the entire principal balance of your loan. That will make you feel like you need to be rushed to the ER.
If your driving skills are excellent and you pay your loan off during the 60 – 90 day window that is known as the “open period”, you will avoid this late fee. Not one day before and not one day later. Pay your loan off the day after the maturity date and you will be hit! Let’s say you have a $25MM loan and your late fee is 5%; the late fee for paying your loan off the day after maturity is $1,250,000.00! You may just need a trip to the ER after all!