It is always interesting to get people’s feedback on the CMBS assumption process. It is either horrible or fine; and the reaction is always predicated on whether the strongest party in the transaction was the seller or buyer.

So, let’s say on one hand, Bill Gates is selling his commercial real estate property to me and I am assuming the CMBS loan.  I promise you we will BOTH have a horrible experience with the CMBS assumption approval process in this scenario!  Not to mention the “God awful” conditions that will be placed on me!

Now, on the other hand, let’s assume Bill Gates is buying the same property and I am the seller this time. This time we will probably both have a good experience with the process.

WHY is that?

Because the main objective of the whole CMBS assumption underwriting process is to ensure the CMBS Trust is no worse off with the buyer than they were with the current owner (or their current borrower).  Now it should be crystal clear why the process would be horrible if Bill Gates was the current owner and I was the buyer – and yet, flipping the parties around, the process would go smooth. The CMBS Trust is much better off with Bill Gates than they are with me! No question!

So…now the penultimate question is this?  Which party in the CMBS assumption approval process can see BOTH the buyer’s information AND the seller’s information? The servicers can, of course, but they are the very party you have to negotiate with on the conditions. How can you effectively negotiate conditions if you don’t even know what the servicers are seeing?

And THAT is the primary role of the CMBS facilitator or expeditor!