Conduit CMBS pools many loans (typically 30 to 60) into one trust and tranches the cash flows. Single-borrower CMBS securitizes one large loan (usually $100 million plus) in its own trust. Single-borrower offers more structural flexibility, custom prepayment provisions, and is used for trophy assets and large portfolios.
What does single-borrower offer that conduit does not?
Custom prepayment regimes (open windows, soft prepayment penalties), tailored cash-management terms, partial-release mechanics on multi-asset deals, and faster decision-making on amendments. The trust is single-purpose, so the indenture and servicing terms reflect the deal's specific economics.
Why is conduit cheaper at small balances?
Conduit shares fixed costs (rating-agency review, trustee, legal, distribution) across many loans. A $20 million loan in a conduit absorbs roughly 1 percent of pool overhead; the same loan in a single-borrower deal would carry the full overhead alone, making single-borrower uneconomic at small loan sizes.
Sources
- Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations · Mortgage Bankers Association · 2026-Q1