Borrowers and lenders, having survived the Great Recession and now facing the possibility of another recession with both the federal government and real estate owners and lenders having significantly fewer tools with which to deal with it, are attempting to avoid the costly mistakes of the past. Among the victims of the Great Recession were many sophisticated lenders and investors whose deals collapsed because the structure and documentation did not anticipate events. Between the continued absence of the securitization market, the moribund recovery, the limited available assistance from the federal government, debt stacks with multiple levels of senior and mezzanine debt, and the cost and complexity of new governmental laws, regulations, and mandates emanating from Dodd-Frank, there are tremendous hurdles facing anyone involved with commercial real estate financing. Moreover, a major obstacle in commercial real estate financing is structuring a transaction to contain a mechanism to deal with an unpredictable economy and constantly changing laws and regulations. The following are issues that need addressing to ensure the viability and availability of commercial real estate financing.
Providing Consistency in Law and Regulations
Improving Mezzanine Financing for Junior Lenders
Protecting Loan Participants
Protecting Lenders from Sliced and Diced Loans
Dealing with Non-Recourse Carveouts
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