This seminar will provide its attendees with the most common legal issues in commercial real estate lending transactions and the practical resolutions thereof. The faculty will also provide practical guidance to lenders, borrowers and attorneys regarding the various stages of the commercial real estate loan process and will address the following topics, among others:
- The commercial mortgage loan process
- Due diligence
- Financing requirements
- Construction lending
- Representation, warranties and covenants
- Loan documentation and negotiating strategy
- The attendee will be able to discuss how a securitized loan is formatted.
- The attendee will be able to identify the value of relationship banking.
- The attendee will be able to review the construction loan disbursement process.
8:30 a.m. - 9:00 a.m.
I. Overview Of Commercial Mortgage Loans
A. Conduits Securitization vs. Insurance Companies And Banks
2. Loan Amount
4. Who Buys (CMBS)
5. Most Insurance Company Loans Are Securitized/Conduits
B. History (1988 RTC Today) 1988 Through Today (RTC)
C. The Players
1. Mortgage Bankers Originators And Closers
3. Investment Bankers
4. Rating Agencies
5. Buyers Of CMBS 'B' Piece Buyers
6. Borrowing Entity (No Personal Liabilities)
9:00 a.m. - 9:30 a.m.
II. How Is A Securitized Loan Formatted?
B. B' Piece (Credit Enhancement)
9:30 a.m. - 9:45 a.m.
III. The Process
A. Preliminary Review Of Income Stream Sizing/Loan Amount
B. Preliminary Presentation To Real Estate Committee
C. Issue Application And Define Spread
D. In-Depth Due Diligence Varies With Property Type
E. Presentation To Final Committee Sizing And Rate
G. Closing And Disbursement
9:45 a.m. - 10:00 a.m.
IV. Due Diligence Varies By Property Type
A. The Mortgage Is Secured By A Parcel Of Commercial Real Estate With A Stable Income Stream
B. Consider That There Is No Personal Guarantee Therefore The Property Standing Alone Must Support The Mortgage
C. Analyze Leases Co-Tenancy Escape Clauses
D. Reconciliation Of Cash Flow To Bank Statements And Comparison To Previous Years
E. Location Of Subject And Description Of Competition (Appraisal)
F. Physical Aspects Engineering And Environmental
G. Creditability Of Owners And Borrowing Entity
H. Zoning Survey Title Insurance Casualty Insurance
10:00 a.m. - 10:10 a.m.
10:10 a.m. - 10:55 a.m.
V. Real Estate Financing Requirements
A. Seller Financing
B. Portfolio Lenders
C. Conduit Lenders
10:55 a.m. - 11:20 a.m.
VI. The Value Of Relationship Banking
11:20 a.m. - 12:20 p.m.
Lunch (On Your Own)
12:20 p.m. - 2:20 p.m.
VII. Construction Lending
A. Borrower's Role In The Transaction
B. Lender's Role In The Transaction
C. Importance Of Control Over Flow Of The Underwriting And Documentation Process
D. Construction Issues
E. Construction Bonding Issues
F. Funding The Loan
G. Title Insurance
H. The Loan Disbursement Process
I. Repayment Of The Loan
2:20 p.m. - 2:30 p.m.
2:30 p.m. - 3:30 p.m.
VIII. Representations, Warranties And Covenants
A. Representations And Warranties
B. Affirmative Covenants
C. Negative Covenants
D. Financial Covenants
3:30 p.m. - 4:30 p.m.
IX. Loan Documentation And Negotiating
A. Promissory Note
1. Interest Rates; Usury In Maryland
2. Amortization; Hyper-Amortization
3. Common Remedies; Confession Of Judgment
B. Deed Of Trust, Assignment Of Leases And Rents
1. Transfer Restrictions
2. Releases; Partial Releases
C. Collateral Assignments
1. Construction Contracts, Architect's Agreements
2. Permits, Plans And Specifications
3. Property Management Agreements
4. Service, Maintenance And Operating Agreements
D. Cash Management Agreement
1. Waterfalls, Buckets, Lockboxes, Springing Lockboxes