Commercial Real Estate Lawyer Blog

When a commercial real estate loan goes, or is going, bad, each party has options. Pretend and extend, state receiverships, foreclosures, short sales, bankruptcies, and deeds-in-lieu of foreclosure - whether within or without the context of a formal workout agreement - each has its own pros and cons for each party. Deciding what to do is particularly difficult in the case of a hotel, since a hotel is both a real estate investment and an operating business, usually with labor unions and flags, sometimes with public/private incentives, and often with numerous other third parties. Hotels that are part of a complex including condominiums or other facilities add even more interested parties and their lenders. The following are some of the main considerations involved.

Continue reading "Workout Incentives and Disincentives, Especially with respect to Hotels" »

The below addresses what challenges an owner may make to the purchase price obtained in a Maryland foreclosure sale of commercial real estate. Since this area of the law is changing rapidly, the reader needs to check statutes adopted, and cases rendered, after 10/21/08 and, particularly, not to assume that any of the below applies to residential property.

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If mezzanine and other lenders are involved when a real estate project is going badly, especially one in the middle of construction, the lenders will probably have to decide whether, and, if so, on what terms, to continue finding. If the best course of action is indeed to continue funding, then issues are likely to arise as to how to incentivize potential funding sources to provide the additional funds, and the developer, if the developer is the best person to complete the construction, to continue. Obviously, many risks and variations are possible. The following form is a template for addressing some of those issues and is to be used in the context of local boilerplate.

Continue reading "Form - Workout Agreement to Continue Funding Construction" »

The following form is designed to address the situation in which a lender and the borrower agree upon a workout in the form of a deed-in-lieu. As with all forms, it needs to be tailored to the particular transaction. Furthermore, it does not include state and local requirements or any of the boilerplate.

Continue reading "Form - Workout Agreement for a Deed-in-Lieu" »