GRAPEVINE, TX—Imagine for a minute that you own a commercial real estate property with CMBS debt on it. And let's assume that you successfully negotiated for control of your own property's cash and therefore, the CMBS servicer does not control your cash. As long as the loan payments are current, you get to decide how best to spend the remainder of the money. All is good.

And then, even while your property is performing well, and your loan payments are current, you get a notice from the CMBS servicer stating that you have triggered cash management and now the servicer will be in control of your property's cash! That is called springing cash management and it may surprise you as much as a jack in the box does when you are turning the nob!

You may have understood that your loan documents had this springing cash management feature, but you likely didn't understand how you could trigger cash management while your property is performing well, and your loan payments are current.