Commercial Mortgage-backed Securities (CMBS) are a type of fixed-income investment product that is backed by mortgages on commercial properties, rather than residential real estate. Commercial Mortgage-backed Securities (CMBS) can provide liquidity to both real estate investors and commercial lenders.CMBS are typically issued by investment banks and other financial institutions, and are then sold to investors in the form of bonds. The bonds are then used to finance the purchase or refinancing of commercial properties.The main advantage of CMBS is that they provide a source of liquidity for commercial real estate investors. This is because the bonds can be easily traded on the secondary market. CMBS also offer a higher degree of safety than other types of investments, such as real estate investment trusts (REITs).The main disadvantage of CMBS is that they are subject to the same risks as other types of bonds, such as interest rate risk and credit risk. In addition, the value of CMBS can be volatile, which can make them a risky investment.
If you are considering investing in CMBS, it is important to speak with a financial advisor to discuss your specific investment goals and objectives.