Revising Real Estate Finance Documents in Times of Economic Uncertainty

Financial Covenants, Leasing Provisions, Secondary Financing, Disbursement Conditions, Recourse Carveouts

An encore presentation.

Recording of a 90-minute premium CLE webinar with Q&A

Conducted on Monday, November 23, 2020

Recorded event now available

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Program Materials

This CLE webinar will consider key provisions in loan documents that could be affected by the COVID-19 pandemic, including financial covenants, cash management provisions, additional indebtedness, non-recourse carveouts, and loan disbursement conditions. The panel will discuss the adjustments to make to existing transactions and how these provisions might change in loan agreements going forward.


The economic fallout caused by COVID-19 presents new challenges for commercial real estate borrowers and lenders. Financial and other covenants in existing documents may need to be waived or modified to avoid loan defaults and foreclosure. Lenders may want to add new covenants and obligations to loan documents, and borrowers will want to negotiate for protections related to factors beyond their control.

Lenders and borrowers should consider whether relief from debt service coverage and other financial covenants will be necessary. If borrowers own properties where tenants seek rent reduction or forgiveness, borrowers should consider the impact on any financial and leasing covenants. Lockbox provisions may need to be revised to provide the lender with more flexibility in addressing tenant vacancies or DSCR triggers.

In construction loans or other loans with a future funding component, borrowers may be unable to satisfy conditions precedent to disbursement due to force majeure clauses, and their inability to make continuing representations and warranties required by lenders. Current and future documents may need revision to address disbursement issues presented by the pandemic.

In light of the PPP and other CARES Act lending programs, borrowers may seek, and lenders might want to consider, allowing additional indebtedness, mainly where the borrower will be entitled to loan forgiveness or will prepay the loan before the maturity of the senior debt. The COVID-19 pandemic may also force borrowers and lenders to revisit nonrecourse or "bad-boy" carveouts as well as provisions regarding springing liability for bankruptcy or insolvency.

Listen as our authoritative panel discusses the impact of COVID-19 on existing and future real estate finance documentation.



  1. Financial covenants: DSCR, LTV, other
  2. Construction and other loan disbursements: loan balancing conditions, force majeure
  3. Cash management: lockbox triggers
  4. Leasing covenants and occupancy requirements
  5. Reps and warranties
  6. Recourse carveouts
  7. Additional financing: PPP and Main Street Lending Programs


The panel will review these and other documentation issues:

  • How should loan documents address commercial and retail tenant defaults due to COVID-19 and government-imposed shutdowns?
  • What changes may be necessary to DSCR and other covenants to avoid loan defaults or cash management triggers?
  • How should loans involving future disbursements be tailored to address the current economic uncertainty?
  • What revisions should be made to subordinate financing provisions to accommodate PPP and other CARES Act financing?

An encore presentation.


Price, Christopher
Christopher B. Price

Goodwin Procter

Mr. Price serves as co-chair of the firm’s Real Estate Joint Ventures and Finance practice. He practices in all...  |  Read More

Rosenbleeth, Christopher
Christopher W. Rosenbleeth, Esq.

Chair, Real Estate
Stradley Ronon Stevens & Young

Mr. Rosenbleeth regularly represents banks and other financial institutions, corporate clients and strategic investors...  |  Read More

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