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Accepting the Challenge
July 30, 2020 | Issue No. 14
Partner | Real Estate
Associate | Real Estate

In the wake of the global COVID-19 pandemic and the related economic fallout, Borrowers and Lenders have found themselves in a novel and challenging business environment. Commercial mortgage Lenders have been, and will continue to be for the foreseeable future, inundated with loan modification and workout requests from Borrowers who have defaulted under their loans, are facing an imminent Default or just need some “breathing room.” 

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Partner | Real Estate
Associate | Real Estate

There is often confusion amongst lenders and borrowers between the nature of hotel financings and the general umbrella of real estate loans. This is because whilst it is possible to construct a financing against a hotel through a lease arrangement (typically an OpCo/PropCo), hotel financing is generally delivered as a corporate facility relying on corporate covenants (such as an EBITDA covenant based on the earnings of the hotel itself). The analysis, controls and the exit strategies are different. As distinct from general real estate loans, hotel facilities are almost a hybrid between a real estate facility and a corporate facility, as the underlying collateral (being the hotel) is ultimately a business, and the cashflow is dependent on the success of the operation of the hotel. It is a very specialised area of lending, with many specific covenants and tripartite agreements with third parties to ensure the lender’s rights are adequately protected. In this series, we discuss some of the characteristics specific to a hotel facility, and also some of the common issues/pitfalls to avoid in providing hotel financing.

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Partner | Real Estate
Special Counsel | Real Estate

On June 2, 2020, in HH Mark Twain LP v. Acres Capital Servicing LLC, the Supreme Court of the State of New York denied the defendant’s motion to dismiss the plaintiff’s “clogging” claim, thereby providing a piece of an answer to a cliffhanger from two years ago regarding whether a lender can safely structure a loan that is secured by both a mortgage and an equity pledge without violating a borrower’s equitable right of redemption.

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Partner | Real Estate
Associate | Real Estate

U.S. Rep. Van Taylor (R-TX) has circulated a draft bill that would require the Department of the Treasury to establish and administer a facility to guarantee certain preferred equity investments in commercial real estate borrowers affected by the COVID-19 pandemic. The bill will be called the “Helping Open Properties Endeavor Act of 2020” or the “HOPE Act of 2020.”

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Partner | Real Estate
Associate | Real Estate

A new bill canceling rent for residential tenants, and mortgage payments for some qualified homeowners, was announced recently in New York.

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Partner | Real Estate
Associate

On June 30, 2020, Oregon Governor Kate Brown signed House Bill 4204 entitled “Relating to strategies to protect Oregonians from the effects of the COVID-19 pandemic; and declaring an emergency” (the “Oregon Statute”). In response to the COVID-19 pandemic, the Oregon Statute establishes temporary limitations on lenders’ ability to enforce default remedies during the period of time beginning on March 8, 2020 and ending on September 30, 2020 (which may be extended by executive order no later than September 1, 2020).

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Associate | Real Estate

In commercial real estate finance transactions involving a portfolio of properties located in multiple states, lenders must consider certain title insurance issues unique to such transactions. Lenders will need to request specific types of coverage and be cognizant of certain state-specific and timing issues that are often associated with large portfolio transactions.

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Key Contacts

William P. McInerney
Partner
T. +1 212 504 6118
william.mcinerney@cwt.com

 

Duncan Hubbard
Partner
T. +44 (0) 20 7170 8525
duncan.hubbard@cwt.com

Fredric L. Altschuler
Senior Counsel
T. +1 212 504 6525
fredric.altschuler@cwt.com

 

Melissa C. Hinkle
Partner
T. +1 212 504 6972
melissa.hinkle@cwt.com

Holly Marcille Chamberlain
Partner
T. +1 704 348 5121
holly.chamberlain@cwt.com

 

Alan W. Lawrence
Partner
T. +1 212 504 6332
alan.lawrence@cwt.com

Jeremy Cross
Partner
T. +44 (0) 20 7170 8530
jeremy.cross@cwt.com

 

Bonnie A. Neuman
Partner
T. +1 212 504 5625
bonnie.neuman@cwt.com

Christopher J. Dickson
Partner
T. +1 704 348 5159
christopher.dickson@cwt.com

 

Matthew Robertson
Partner
T. +1 704 348 5257
matthew.robertson@cwt.com

Steven M. Herman
Partner
T. +1 212 504 6054
steven.herman@cwt.com

   
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