Once in a while, an individual who provided a Guaranty for non-recourse carveouts related to a CMBS conduit loan passes away. What happens? CMBS loan documents provide for this event. The Loan Agreement says the Borrower is to give Lender notice to substitute a replacement Guarantor (“Replacement … [Read more...] about 5.17.19: What Happens When a Non-Recourse Carveout Guarantor Dies?
One of the primary benefits of CMBS conduit loans is that they are non-recourse. As such, the borrower and guarantor (typically an individual who owns or controls the majority of the borrowing entity) are not personally liable for repayment of the loan in the event of default and foreclosure. The … [Read more...] about 5.3.17: A Lesson on Why Non-Recourse Is Important
While the recent rise in the Swap rate indexes used to set interest rates for CMBS conduit loans has slowed rate-sensitive borrowers from closing loans, the rise has not deterred borrowers who use the CMBS conduit loan as a tool to extract excess equity in their real estate assets. “Whenever I … [Read more...] about 6.26.15: The Power of Unrestricted Cash Out and Non-Recourse Keeps CMBS Conduit Lending Active
We recently had a conference call with our non-recourse construction lender who laid out a nifty concept to perform a "rough and dirty" loan sizing for hotel construction loans. ValueXpress will be converting these instructions into a simple model that can be found on our website. As a refresher, … [Read more...] about 7.1.14: Sizing Cheat Sheet for Non-Recourse Hotel Construction Loans
In another sign of real estate investors looking for opportunities for investment, financial services companies are beginning to offer non-recourse construction/rehabilitation loans for typical CMBS-quality assets. CMBS-quality assets are preferred as the expected exit strategy is a fixed-rate CMBS … [Read more...] about 5.12.14: Non-Recourse Construction Loans Are Back!