CMBS financing may havefallen out of popularity this cycle, but it remains a greatmiddle-ground debt solution for borrowers. MarkRitchie of Newmark Realty Capitaldescribes CMBS as the goldilocks solutions, with balanced ratesthat can be appealing given the right terms.

“Here's the Goldilocks metaphor. Borrowers need to explore theiralternatives. There is a middle ground where CMBS provides the'just right' debt capital solution. Today CMBS leverage and ratesaren't too high, nor are they ridiculously low,” Ritchie, aprincipal at NRC, tells GlobeSt.com. “The right set of terms can beextremely appealing. Unfortunately for many borrowers a CMBSlending solution has become the loan of last choice, maybe forvalid reasons due to a checkered past, however in it's contemporarystructure CMBS offers a compelling option for the demands oftoday's equity.”

Specifically, CMBS is a good fit for urban and secondary andtertiary markets. These are often areas where other capital sourcesare less aggressive in pricing. “Even the top urban markets on theWest and East coasts—think San Francisco, Los Angeles, New YorkCity—can benefit from the ability of CMBS to provide an attractivefunding solution,” says Ritchie. “With a 65% loan-to-value,10-years interest only structure available, the right CMBSexecution creates strong cash flow over the life cycle of assetownership, which we have seen as a driving consideration in today'smarket environment.”