CMBS loans embed servicing fees (master and primary, typically 1 to 3 basis points), trustee fees (1 to 2 basis points), and special-servicing transfer fees triggered on default . Together routine administrative costs add 4 to 8 basis points to the coupon . Special-servicing fees layer on at 25 to 50 basis points if the loan transfers.
What is the master servicer?
The master servicer collects payments, tracks insurance, and reports to the trust. The fee is paid out of the coupon, the borrower never receives a separate invoice. Master-servicer rights are established in the pooling and servicing agreement and cannot be modified by the borrower.
Why does this matter to the borrower?
Two effects. First, all-in cost: the spread quoted by a CMBS originator already includes servicer and trustee economics, so apples-to-apples comparison with a balance-sheet quote requires backing those out. Second, special-servicing exposure: if the loan defaults, the special servicer's annual fee compounds the workout cost meaningfully.
Sources
- Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations · Mortgage Bankers Association · 2026-Q1