Structuring Real Estate Financing With Foreign Borrowers, Trusts, and Tenants in Common

Documenting U.S. Assets of Foreign Guarantors, Reviewing TIC Agreements, Revocable vs. Irrevocable Trusts, and More

A live 90-minute premium CLE video webinar with interactive Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Tuesday, February 7, 2023

1:00pm-2:30pm EST, 10:00am-11:30am PST

Early Registration Discount Deadline, Friday, January 13, 2023

or call 1-800-926-7926

This CLE course will enable counsel to structure real estate loans with borrowers that are foreign investors and guarantors; trusts as investors or guarantors; and tenants in common (TIC). Lending standards have evolved for handling the different borrowers. The panel will discuss issues unique to each type of borrower, as well as additional due diligence and loan document revisions needed to address these issues.

Description

Nonstandard borrowers and guarantors present underwriting and documentation challenges for lenders. Counsel must know how to structure loans with each type of borrower and guarantor. For borrowers that include foreign investors, lenders will require foreign as well as domestic anti-terrorism, anti-money laundering, and credit/litigation searches on each investor.

To allow for suit and collection in the U.S., foreign guarantors should be underwritten based on U.S.-held assets and agree to maintain a minimum U.S. net worth and liquidity throughout the loan term. If the borrower is a TIC, then there must be a TIC agreement which may appoint a managing agent, subordinates TIC claims to the loan, and addresses the parties' relationship to each other and the lender.

Trusts require special attention. Counsel must identify the assets in the trust, determine whether the trust is revocable, and understand conditions for removal of the trustee and how death or insolvency of the trustee or beneficiaries impacts control. Beneficiaries, as well as the trustees, may have to be underwritten as principals in the transaction.

Listen as our authoritative panel prepares lender's and borrower's counsel to structure transactions where borrowers are either foreign investors and guarantors; trusts as investors or guarantors; and/or TICs. The panel will review due diligence concerns with foreign investors, the role of U.S. assets and U.S. agents for foreign guarantors, subordination and other TIC agreement provisions, the trustee-beneficiary relationship of the trustee, revocable trusts, U.S. SPE borrowers in these transactions, and more.

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Outline

  1. Foreign parties as investors and guarantors
    1. OFAC, anti-money laundering, and other due diligence
    2. The requirement of domestic assets (if guarantor)
    3. Need for a domestic single-purpose entity
    4. Appointment of U.S. agent; loan document revisions
  2. Tenants in common
    1. Key provisions in the TIC agreement
    2. Need for each TIC to be an SPE
    3. Appointment of managing TIC or other designated manager
    4. Subordination of TIC agreement and TIC claims; loan document revisions
  3. Trusts as investors and guarantors
    1. Revocable vs. irrevocable trust: nailing down trust assets
    2. Role of the trustee, beneficiaries--identifying control issues
    3. Transfer and other loan document revisions

Benefits

The panel will review these and other key issues:

  • What are the additional due diligence and structuring requirements for borrowers with foreign investors?
  • Why are U.S. assets and a U.S. agent for service important for loans with foreign guarantors?
  • How should TIC borrowers be structured, and what provisions are critical in the TIC agreement and the loan documents?
  • What are the key issues that arise in lending to trusts, and how should those transactions be documented?

Faculty

Keegan, Gerard
Gerard C. Keegan, Jr.

Partner
Alston & Bird

Mr. Keegan is Co-Chair of the firm’s Real Estate Finance and Investment Group. He represents institutional...  |  Read More

Jon S. Robins
Jon S. Robins

Shareholder
GreenbergTraurig

Mr. Robins handles a broad range of finance, equity investment, and real estate activities for clients in the private...  |  Read More

Attend on February 7

Early Discount (through 01/13/23)

Cannot Attend February 7?

Early Discount (through 01/13/23)

You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. Strafford will process CLE credit for one person on each recording. All formats include course handouts.

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