CMBS
Surveillance
Each CMBS servicer has a team of people devoted to reviewing all triggers in your loan documents and notifying you of when any trigger has been happened.
Our service provides you with a team that will do the exact same calculations proactively to ensure that you do not inadvertently trigger cash management or cash sweep. We do this by reviewing and tracking all triggers in your loan documents and offering guidance on how to avoid cash management/cash sweep, fees, and default.
Here’s How We Do This
Calculate DSCR in line with loan document definitions
- Income and expense definition typically include exclusions and market adjustments in the calculation. That is why most owners are surprised when they get the notice from the servicer that cash management or cash sweep has been triggered.
- We mimic the servicer calculation
- Where possible, make small adjustments prior to sending to servicer to avoid cash management triggers
Track major lease expirations
- The notice period for lease expirations for trigger tenants is often not consistent with the lease notice provision
- Ensure servicer is notified of renewal/non-renewal per notice period in loan agreement
Periodic required lender reporting
- Ensure all required reporting is submitted to servicer timely to avoid penalties
Review draft new loan documents on any new loans
- Review definitions of income and expenses to avoid inadvertent/unnecessary cash management triggers
- Ensure that all tenant notification requirements match leases
- Provide feedback to ensure trigger terms are consistent with market
Track servicer data reported on your loan monthly
- Notify you if your loan goes on watchlist along with servicer comments as to why
- Notify you when an appraisal is posted
- Notify you of any other significant event on your loan or pool
On an as needed basis, seek approval for the following consents:
- Leases
- SNDAs
- Change in property management firms
- Release of funds in reserves
- Changes in reserve requirements (i.e., change of property tax amount)