CMBS Assumptions Have Painful Conditions!

By: Ann Hambly

If you plan to assume an existing CMBS loan, be prepared for painful conditions!

It is easy to assume that a loan that was underwritten and funded in late 2015 would already have all the required reserves in place.  Not so!  The company originating the loan had an objective of getting the loan funded, which meant competitive terms.  The servicer performing the underwriting during an assumption has a completely different objective – and that is to ensure the loan won’t default again between assumption and maturity.

If you are a seller, broker or buyer with CMBS debt in place, the best thing you can do to ensure the deal has a chance of closing is to understand all the possible conditions at the beginning of the transaction!

Let us prepare you before you waste months of your life and money!