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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

  • work Practice Area

    Real Property - Finance

Date & Time
  • event Date

    Tuesday, February 7, 2023

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00
CLE
ALL

This CLE course will enable counsel to structure real estate loans with borrowers that are foreign investors and guarantors; trusts as investors or guarantors; and tenants in common (TIC). Lending standards have evolved for handling the different borrowers. The panel will discuss issues unique to each type of borrower, as well as additional due diligence and loan document revisions needed to address these issues.

Faculty

Gerard C. Keegan
Partner
Alston & Bird LLP

Mr. Keegan is Co-Chair of the firm’s Real Estate Finance and Investment Group. He represents institutional lenders in all aspects of real estate financings and restructurings and investors in the acquisition, development and operation of commercial properties, including retail, office, hospitality and mixed-use projects. Mr. Keegan has expertise in the representation of investment and national banks and other lenders in the origination, securitization, syndication, sale and workout of commercial real estate loans.

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Jon S. Robins
Shareholder
Greenberg Traurig LLP

Mr. Robins handles a broad range of finance, equity investment, and real estate activities for clients in the private equity fund, capital market, institutional lender, REIT, hedge fund, developer, owner/operator, corporate, and investor space. For more than two decades, he has represented lenders and equity providers, including conduit lenders, banks, insurance companies, family offices, and private equity funds, in diverse matters such as the formation of joint ventures, structuring and making preferred equity investments, the origination, purchase, sale, restructuring, and enforcement of mortgage loans; mezzanine and construction loans; subordinate ("B") notes; participation and co-lender interests; and in structuring and negotiating inter-creditor, co-lender, and participation and servicing agreements. In complex and novel structures of mortgage and mezzanine loans, he often represents CMBS lenders and borrowers.

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Description

Nonstandard borrowers and guarantors present underwriting and documentation challenges for lenders. Counsel must know how to structure loans with each type of borrower and guarantor. For borrowers that include foreign investors, lenders will require foreign as well as domestic anti-terrorism, anti-money laundering, and credit/litigation searches on each investor.

To allow for suit and collection in the U.S., foreign guarantors should be underwritten based on U.S.-held assets and agree to maintain a minimum U.S. net worth and liquidity throughout the loan term. If the borrower is a TIC, then there must be a TIC agreement which may appoint a managing agent, subordinates TIC claims to the loan, and addresses the parties' relationship to each other and the lender.

Trusts require special attention. Counsel must identify the assets in the trust, determine whether the trust is revocable, and understand conditions for removal of the trustee and how death or insolvency of the trustee or beneficiaries impacts control. Beneficiaries, as well as the trustees, may have to be underwritten as principals in the transaction.

Listen as our authoritative panel prepares lender's and borrower's counsel to structure transactions where borrowers are either foreign investors and guarantors; trusts as investors or guarantors; and/or TICs. The panel will review due diligence concerns with foreign investors, the role of U.S. assets and U.S. agents for foreign guarantors, subordination and other TIC agreement provisions, the trustee-beneficiary relationship of the trustee, revocable trusts, U.S. SPE borrowers in these transactions, and more.

Outline

  1. Foreign parties as investors and guarantors
    • OFAC, anti-money laundering, and other due diligence
    • The requirement of domestic assets (if guarantor)
    • Need for a domestic single-purpose entity
    • Appointment of U.S. agent; loan document revisions
  2. Tenants in common
    • Key provisions in the TIC agreement
    • Need for each TIC to be an SPE
    • Appointment of managing TIC or other designated manager
    • Subordination of TIC agreement and TIC claims; loan document revisions
  3. Trusts as investors and guarantors
    • Revocable vs. irrevocable trust: nailing down trust assets
    • Role of the trustee, beneficiaries--identifying control issues
    • Transfer and other loan document revisions

Benefits

The panel will review these and other key issues:

  • What are the additional due diligence and structuring requirements for borrowers with foreign investors?
  • Why are U.S. assets and a U.S. agent for service important for loans with foreign guarantors?
  • How should TIC borrowers be structured, and what provisions are critical in the TIC agreement and the loan documents?
  • What are the key issues that arise in lending to trusts, and how should those transactions be documented?