Defeasance in Real Estate Finance: Process and Timing, Prepayment and Lockout Provisions
CMBS and SPE Concerns, Structuring Around Mortgage Taxes, Economics of Prepayment vs. Defeasance
Note: CPE credit is not offered on this program
A live 90-minute premium CLE video webinar with interactive Q&A
This CLE webinar will examine the mechanics of defeasance in CMBS and other yield protected commercial real estate loans. The panel will discuss restrictions inherent in yield maintenance and lockout provisions, the timing complexities and documentation of defeasance transactions, CMBS servicing issues, and additional steps required to avoid mortgage taxes in states like New York and Florida.
- Defeasance and yield protection
- Economics of defeasance: weighing costs and benefits of refinancing
- Defeasance, prepayment, and lockout provisions
- Documentation of the transaction
- Parties to defeasance
- Process and timing issues
- Mortgage tax considerations
The panel will review these and other key issues:
- What is the rationale for requiring defeasance in CMBS and other commercial real estate loans?
- How should borrowers calculate the cost of defeasance? Why does defeasance make more economic sense later in the loan term?
- Are there times when a cash prepayment is an option? When is prepayment preferable to defeasance?
- How should the transaction be structured in a heavy mortgage tax state?
Steven M. Herman
Cadwalader Wickersham & Taft
Mr. Herman concentrates his practice in the areas of real estate finance, development, joint ventures, acquisitions,... | Read More
Mr. Herman concentrates his practice in the areas of real estate finance, development, joint ventures, acquisitions, dispositions, commercial leasing, restructurings, workouts, and commercial mortgage securitizations. His work ranges from single- and multiple-asset negotiated and auction transactions to highly structured transactions that span all segments of the marketplace, including office, hotel, retail, multifamily, mixed-use healthcare, and industrial facilities. Mr. Herman's clients include investment banks, commercial banks, developers, investors, partners, lenders, owners, fund managers, borrowers, tenants, landlords, issuers and underwriters. He is also actively engaged in assisting his clients with the transition from LIBOR, including conducting contract remediation, implementing enterprise-wide changes to form documents, and providing strategic guidance throughout the transition.Close
Andrea G. Weitzman
Cadwalader Wickersham & Taft
Ms. Weitzman is an associate in Cadwalader’s Finance Group. Her practice is concentrated in the area of... | Read More
Ms. Weitzman is an associate in Cadwalader’s Finance Group. Her practice is concentrated in the area of commercial real estate finance.Close
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