Commercial Mortgage-Backed Securities (CMBS)

Commercial Mortgage-Backed Securities (CMBS) are investment products created by pooling together large commercial real estate loans, such as loans on office buildings, shopping centers, or hotels. These pools are then sliced into securities and sold to investors. In return, investors receive regular payments derived from the interest and principal payments on the underlying loans. CMBS allow lenders to free up capital and transfer risk, while investors gain exposure to the commercial real estate market. Their value depends on the ability of borrowers to repay their loans and the overall health of the commercial real estate sector.