Hotels
Hotel CMBS
A hotel CMBS loan is a fixed-rate, non-recourse mortgage from a conduit lender that pools the loan with others and sells it as commercial mortgage-backed securities. It suits stabilized, flagged or well-run independent hotels where the borrower wants term certainty and no personal recourse beyond customary carve-outs.
Key facts
Figures as of 2026-10-31. Program rules change by notice, so an advisor confirms current terms with lenders before you rely on any figure.
| Item | Figure | Source and date |
|---|---|---|
| Term / amortization | 10-year fixed / 30-year schedule | Corin sizing estimate; as of 2026-10-31 |
| Max LTV | 65% | Corin sizing estimate; as of 2026-10-31 |
| Minimum DSCR | 1.40x | Corin sizing estimate; as of 2026-10-31 |
| Minimum debt yield (premium flag / economy flag / boutique or independent) | 11.0% / 12.0% / 12.5% | Corin sizing estimate; as of 2026-10-31 |
| Typical minimum loan | $5M | Corin sizing estimate; as of 2026-10-31 |
| Indicative pricing | Ten-year Treasury + 2.50–3.25 points | Corin sizing estimate; as of 2026-10-31 |
| Prepayment | Defeasance or yield maintenance | Corin sizing estimate; as of 2026-10-31 |
How hotel CMBS is underwritten
Conduit underwriters size to the lowest of leverage, DSCR and debt-yield tests, then apply property-level reserves for furniture, fixtures and equipment. Hotel income is volatile, so underwriters use trailing and STR-benchmarked performance and haircut it.
The key metrics are ADR, occupancy and RevPAR (ADR multiplied by occupancy), STR penetration against the competitive set, NOI per key, and the franchise term remaining.
- Any open PIP must be complete or reserved
- Franchise term should run well past the loan maturity
- Non-recourse carve-outs include fraud, bankruptcy and misapplication of funds
CMBS or SBA 504
CMBS is non-recourse and handles larger balances, but is inflexible after closing, since prepayment requires defeasance or yield maintenance and lender consent is needed for changes. SBA 504 usually prices lower on owner-operated hotels but carries personal guaranties and a lower balance cap on the SBA piece.
Frequently asked questions
What is the minimum loan size for hotel CMBS?
Conduits typically start around $5M. Smaller hotels usually fit SBA 504, a bank loan or a bridge.
Is hotel CMBS non-recourse?
Yes, with customary carve-outs for events like fraud, misapplication of funds and voluntary bankruptcy. Those carve-outs can create full liability if triggered.
Can I pay off a CMBS loan early?
Early payoff generally requires defeasance (replacing the collateral with Treasuries) or yield maintenance. The cost depends on the rate environment and the remaining term.
Related programs
- SBA 504 hotel loansBank first lien plus a 25-year fixed CDC debenture for owner-operated hotels.
- PIP bridgeFloating, interest-only debt to complete a franchise renovation before a permanent takeout.
- SBA 7(a) + 504 hotel stackA combined 7(a) and 504 structure for larger hotel projects.
- Hotel to senior living conversionAcquisition and conversion bridge for turning a hotel into licensed senior living.
- Hotel financingSBA, CMBS and bridge options for hotel owners and buyers.
Talk through your deal with an advisor
Send the basics and a licensed Corin advisor reviews which programs and lenders may fit, or size the loan yourself first.