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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, November 15, 2022

  • 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 brief real estate counsel on the advantages of using a revolving line of credit to finance a commercial real estate portfolio and on how revolving lines are structured and documented.

Faculty

Matthew L. Strayer
Partner
Bricker & Graydon LLP

Mr. Strayer represents buyers, sellers, owners, developers, and lending institutions on real estate projects involving retail, hospitality, industrial warehouse, and other uses and industries. He also has experience representing landlords in relation to commercial leasing and other end uses. Additionally, Mr. Strayer represents construction and permanent mortgage lenders in the negotiation and documentation of new and restructured commercial loans.

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Caroline W. Dreyfus
Partner
Cox Castle & Nicholson LLP

Ms. Dreyfus is a finance attorney with a practice that involves assets in every state, having represented every type of lender from large national banks and life insurance companies to small private lenders and conduit lenders. She also works with borrowers in acquisitions and dispositions as well as all their financing needs. The types of transactions for both lenders and borrowers cover the entire spectrum from straight mortgage and construction loans, CMBS loans, Fannie Mae and Freddie Mac loans, and mezzanine loans to lines of credit, syndicated loans, and sale-leaseback transactions. Ms. Dreyfus also represents clients in the selling and purchasing of loans, both individual notes along with portfolios, including an analysis of all the due diligence and existing financing documents.  

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Description

Revolving lines of credit present a financing structure alternative for developers and other borrowers who are active in the real estate marketplace and desire the ability to acquire, develop, sell, and refinance properties in their portfolios without entering into a new loan transaction each time.

The revolving line of credit allows the borrower to draw funds as needed to finance the purchase of additional property or for other purposes and pay down the loan balance should it sell a property, without a requirement of defeasance or yield maintenance.

Listen as our authoritative panel discusses these credit facilities' legal issues and documentation and the procedures for making draws and repayments (and obtaining releases). They will also review other attributes of these loans, typically short-term with a floating interest rate and requiring interest rate hedging.

Outline

  1. Advantages of revolving lines of credit over standard mortgage financing
    1. Opportunistic acquisition; an assemblage of portfolio or sale of properties out of the portfolio
    2. Ability to make draws and pay down loan balance without penalty
  2. Loan terms generally
    1. Structure overview
    2. Procedures for draws outlined in loan documents: expedited "closings"
    3. Short-term; floating rate (hedged)
  3. Documentation
    1. Borrower and entity structures
    2. Holding company: pledge of equity interests; UCC perfection
    3. Individual borrowers and properties
      1. Joinder agreement
      2. Borrower formation documents; reps and warranties
      3. Mortgages on each property (if required)
  4. Title issues

Benefits

The panel will review these and other key issues:

  • The problems with standard permanent mortgage loans and the additional flexibility provided under a revolving line of credit
  • How to best structure the line of credit borrower
  • Adding new borrowers under joinder agreements
  • Pledging of equity interests as security and UCC perfection issues
  • Cross-collateralization of mortgages and when mortgages are required