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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, May 25, 2021

  • 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 examine debt financing options available to real estate investment funds, common structures and terms for these fund financing products, and the advantages and disadvantages of each. The panel will also discuss the relationship of fund finance to mortgage debt at the property level.

Faculty

Max W. Fargotstein
Attorney
Duane Morris LLP.

Mr. Fargotstein represents both lenders and borrowers in a wide variety of debt financing transactions including secured financings, cash flow financings, acquisition financings, asset-based financings and other commercial lending transactions. In addition to a traditional commercial lending practice, he has experience with specialty finance transactions such as equipment leasing, transportation asset financings (secured by aircraft, vessels and/or railcars), insurance premium financings and real estate financings. Mr. Fargotstein’s practice includes the representation of private and public businesses, corporate borrowers, financial institutions, commercial banks, non-bank lenders, private equity funds, leasing companies and other participants in the financial services industry.

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Anastasia V. Stark
Managing Director and Partner
Fund Finance Partners

Ms. Kaup has represented asset managers, fund sponsors, investment funds, bank and non-bank lenders, and other parties in financing and investment transactions across the private equity, private credit, real estate, hedge fund, venture capital, and distressed investment spaces. She structures, negotiates, and documents complex financing transactions domestically and internationally at all levels of the organizational structure.

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Description

The COVID-19 pandemic has had a severe negative impact on the commercial real estate market, presenting an opportunity for private real estate investment funds to invest in distressed real estate assets. For real estate funds, third-party debt financing can provide capital to take advantage of these investment opportunities, meet financing needs and achieve other objectives.

Fund financing products can take several forms, including: subscription credit facilities secured by the capital commitments of a fund’s investors; management fee lines of credit secured by the fees the fund manager receives for managing the fund’s investments; partner loan programs offered to fund investors or the general partner; net asset value (NAV) credit facilities secured by the fund’s investment portfolio; or hybrid credit facilities combining certain aspects of subscription and NAV credit facilities.

Each fund financing product has unique structuring attributes, and may be most appropriate depending on where the fund is in its lifecycle and the desired use of the financing proceeds.

Listen as our authoritative panel discusses various finance alternatives available to real estate funds, common structures and terms, and the features, advantages, and disadvantages of each.

Outline

  1. Market Overview: real estate funds and opportunistic investing
  2. Common fund financing products and structures and terms, including:
    1. Subscription credit facilities
    2. Management fee lines of credit
    3. Partner lines of credit
    4. NAV credit facilities
    5. Hybrid credit facilities
  3. Considerations: including the interaction between mortgages and fund financing

Benefits

The panel will review these and other relevant issues:

  • What are some of the fund financing options available to real estate investment funds, and how do they interact with property-level (mortgage) debt?
  • How are fund financings structured and what are some of the benefits to real estate investment funds that utilize fund financing?