In one sentence
Commercial mortgage-backed securities, bonds backed by pools of commercial real estate loans sold to capital-markets investors.
The longer version
CMBS aggregates commercial mortgages into securitized pools, funding loans through the bond market rather than a balance sheet. It offers borrowers non-recourse leverage with the tradeoff of rigid servicing and prepayment via defeasance.
CMBS loans carry standardized structures and servicing that borrowers and lenders template around, from origination through the servicing and eventual payoff.
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