Estimate the total cost of defeasing your CMBS or conduit commercial loan. See the Treasury portfolio cost, transaction fees, and how it compares to yield maintenance.
Estimate your CMBS loan exit cost
Exploring CMBS loan exit options?Our advisors coordinate defeasance consultants and refinance lenders.
Get Expert Guidance →The most complex — and often most expensive — way to exit a CMBS loan.
Instead of paying a penalty, you purchase a portfolio of US Treasury bonds that exactly replicate your remaining loan payments. These bonds replace your property as collateral, releasing it from the mortgage. The CMBS trust continues receiving payments from the Treasuries.
The Treasury portfolio costs more than your loan balance because Treasury yields are typically lower than your note rate. You also pay substantial transaction fees: legal counsel, accountant to structure the bond portfolio, securities broker, servicer consent fees, and rating agency fees. Total fees alone can be $50K–$150K+.
Defeasance costs drop when Treasury rates rise above your note rate (the bond portfolio costs less than the loan balance) or when you are close to maturity (fewer payments to replicate). In a rising rate environment, defeasance can sometimes be less than yield maintenance.
Expect 45–90 days from start to close. Steps: hire defeasance consultant, notify servicer (30–45 day requirement), legal review, Treasury portfolio pricing and purchase, closing. Some CMBS loans have lockout periods where even defeasance is prohibited for the first 2–5 years.
Common questions about CMBS defeasance.
Our advisors coordinate defeasance consultants, compare exit strategies, and line up your refinancing — all in one coordinated process.
Get CMBS Exit Analysis →