Conduit CMBS in 2026 typically caps at 65 to 75 percent LTV depending on asset class. Multifamily and industrial top out near 75 percent; office is constrained above 60 percent due to capital-market dislocation; hotel and retail typically cap at 65 to 70 percent reflecting cash-flow volatility and operating risk.
Why does LTV cap by asset class?
B-piece buyers and rating agencies stress different asset classes more aggressively. Office in 2026 carries vacancy and rollover stress that pushes maximum sustainable LTV down meaningfully; multifamily carries less of either, supporting higher leverage. The asset's volatility profile drives the cap.
Can higher leverage be achieved with mezz?
Yes, combining a 65 percent CMBS senior with a mezz fill to 80 percent total leverage is common practice. The CMBS issuer must consent via intercreditor, and most issuer shelves have standardized mezz intercreditor forms that allow predictable execution at term-sheet stage.
Sources
- Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations · Mortgage Bankers Association · 2026-Q1
- Financial Stability Report · Board of Governors of the Federal Reserve System · 2025-11