Yes, but only via defeasance , yield maintenance , or, in the last 90 days of term, the open prepayment window. The first two are expensive when current rates are below your loan rate. The open window is the only cheap exit. Plan refis to land inside that window when possible.
What are the prepayment rules?
CMBS loans typically have an initial lockout period (1 to 2 years post-securitization), then an open period using either defeasance or yield maintenance for the rest of the term, and finally an open prepayment window of typically the last 90 days of term where prepayment is permitted at par.
If you refi inside the open window, your only cost is the standard payoff (loan balance plus accrued interest plus minor administrative fees). If you refi outside the window, you pay either defeasance economics (Treasury portfolio replacement) or yield maintenance (a present-value gap calculation).
When does early refi make sense?
When property value has appreciated enough that pulling cash out at today's rates produces accretive economics even after the prepayment cost. Or when the existing loan is so out of market (e.g., very high rate, restrictive covenants, recourse) that the cost of staying exceeds the cost of leaving. Or when a sale is being forced by partner dynamics, tax considerations, or fund timing.
Get a defeasance or yield maintenance estimate before committing. The numbers move with the Treasury curve and can swing tens of basis points week-to-week.
Sources
- Treasury Constant Maturity Series (DGS5, DGS10) · Federal Reserve Bank of St. Louis (FRED) · weekly
- Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations · Mortgage Bankers Association · 2026-Q1