Final answer:
The feature that causes a CMBS to trade more like a corporate bond than a residential mortgage-backed security is credit enhancement, such as subordination.
Step-by-step explanation:
The feature of a commercial mortgage-backed security (CMBS) that causes it to trade more like a corporate bond than a residential mortgage-backed security is the credit enhancement feature. Credit enhancement refers to the measures taken to reduce the credit risk of a CMBS, making it appear more attractive to investors. One example of credit enhancement is the use of subordination, where the CMBS is divided into different tranches with varying levels of seniority.
By subordinating the riskier portions of the CMBS, investors are more likely to perceive it as a safer investment, similar to a corporate bond. In contrast, residential mortgage-backed securities (RMBS) are backed by residential mortgages, which are considered less risky compared to commercial mortgages. Therefore, CMBSs require additional credit enhancement features to compensate for the inherent risk.