Commercial real estate has been financed in the U.S. capital markets through creation of commercial mortgage-backed securities (CMBS) since the early 1990s, peaking at $240 billion in 2007 and representing about 25% of all commercial real estate financing. The premise is straightforward: loan originators pool mortgage loans secured by a variety of property types located in diversified geographic locations meeting minimum underwriting criteria into a trust, and then that trust issues certificates of beneficial ownership in the pool allocating payments of principal and interest to investors in sequential priority by class (or tranche) based on their desired levels of risk, return and tenor. [See Appendix]. The senior/subordinate structure delivers low risk and low yield to the senior certificate holders, and higher risk with higher yield to junior certificate holders generating the profits for sponsors and originators that drive the deal. [See Appendix – CMBS Profit Structure].