Commercial Mortgages and Commercial Mortgage-Backed Securities

Xudon An and Kerry D. Vandell

in Public Real Estate Markets and Investments

Published in print September 2014 | ISBN: 9780199993277
Published online September 2014 | e-ISBN: 9780199395767 | DOI:

Series: Financial Markets and Investments

Commercial Mortgages and Commercial Mortgage-Backed Securities

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This chapter provides a review of commercial mortgages and commercial backed securities (CMBS). The chapter begins by using a historical perspective to provide an understanding of commercial mortgages and CMBS as an asset class. Next, it provides a detailed discussion of the important issues related to commercial mortgage underwriting and recent perspectives. The following two sections focus on default risk and address CMBS structuring, theoretical foundations, subordination, ratings, and pricing. The final section concludes with a reflection on the future of commercial mortgage and CMBS markets. Commercial mortgage and CMBS markets are suffering from adverse reputational effects from the recent financial crisis. Over time, innovations in technology and capital market instruments and institutional structures for the delivery of capital will provide further opportunities to render the market for commercial property more efficient and complete.

Keywords: commercial mortgages; commercial mortgage-backed securities; CMBS structuring; commercial mortgage underwriting; default risk

Chapter.  8334 words.  Illustrated.

Subjects: Financial Markets

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