CMBS Originations

Maybe this is a bit of a silly question, but can someone give me a bit of background on what CMBS Originations Analysts actually do? Any resources you could point me towards would be helpful too.

What I have found online seems interesting, but I haven’t been able to find much granular information about what these types of roles entail.

Thanks!

 

It depends on the shop. Since we are now in CMBS 2.0, a majority of the originations teams handle deals from cradle to grave (meaning they originate, underwrite and close them). At these shops the analyst will act as a jack of all trades. You will be tasked with screening and performing initial underwriting of potential deals, corresponding with the broker/analyst/borrower (to various degrees depending on the originator's relationship and your overall experience), drafting term sheets, (assuming your team wins the deal) gathering and performing the initial review of due diligence, inputting 3rd party docs, drafting write ups on the deal, and take on whatever tasks needed to close the deal (create charts, perform additional market research, site visits, etc.)

Alex
 

The bigger shops are still churning out deals (not to the same extent though) - but yea agree with what biffanderson said. Adding to that, once the loan is closed, CMBS analysts will also communicate with their capital markets/securitization counterparts and answer rating agency, b-piece investor stuff, etc.

Apart from the cap markets perspective, its not a whole lot different from what a non-cmbs CRE underwriter would do.

 

Securitization and CMBS originations are two separate groups. Although, with the current volatility, Securitization has now become the "boss" to originations. The ability to sell loans is even more paramount today when the average loan makes so little and B-Piece Buyers are kicking more and more loans.

With that said, in the originations and underwriting teams, you often work with the securitization team to answer any B-Piece Buyer and Rating Agency questions.

I have never seen an originator become a trader. The issue is traders really do not look at real estate in the same way as an originator. Trading involves figuring out when it is a good time to buy and sell bonds; whereas, originators are always looking to structuring deals.

 

Can't really classify/rate/stereotype orgination teams across each bank. Teams generally have their own culture that stems from the lead originator. Base salaries will be fairly similar at all of the aforementioned shop.

Bonus is much more dependent on how your origination team performs (i.e. amount and profitability of loans the lead originator brings in), rather than how, for example, Citi's commercial real estate finance group performs over the course of the year.

One of the few defining characteristics between banks is their risk tolerance. Shops like UBS and Loancore tend to go after loans further out on the risk spectrum, which are generally more profitable. So there may be higher upside, and downside, at those platforms.

The best advice I can give is that if you are joining an origination team as a junior member (analyst or associate) make sure you are joining a team with a strong lead originator. If the lead originator sucks, it doesn't matter which bank employs you. You will not get paid.

During the interview process, ask how much they have originated each year over the past few years and their pipeline/expectations for the current year. Anything over $500MM per annum is reasonably strong. That's a good start.

 
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