In recent years, real estate equity and debt funds have played an increasingly significant role in commercial real estate. They have become one of the most common sources of funds in the capital stack of all types of commercial real estate transactions. Sometimes they are the sponsor, sometimes they provide equity capital to the sponsor, and sometimes they are a lender – but they are everywhere.
When a traditional mortgage lender encounters a fund in the capital stack, what types of questions does the lender need to ask? What specific issues might arise in the negotiations? What changes will need to be made to loan documents or intercreditor agreements to accommodate a fund or address issues that the counterparties may face in dealing with a fund? What concerns might a borrower have that is borrowing from a debt fund?
Brad Lavender, a commercial real estate partner at the law firm of haynes and boone, will discuss the above, including special issues to consider
when a fund is directly or indirectly a borrower or part of a borrower (including transfer restrictions and permitted transfers; fund due diligence; and KYC);
when a fund is a guarantor (including calculating net worth and liquidity; funds that are at the beginning of their fund life; and funds that are winding down); and
when a fund is a lender or co-lender (including any special transfer and financing rights that funds need; what special considerations funds need to be a “Qualified Transferee”; intercreditor agreements with funds; and other unique aspects of having a fund as a lender).

Thursday, June 9th

12:30 pm - 2:00 pm