Unprecedented events have occurred in the commercial real estate markets since the high water mark of 2006. Commercial property values, as a whole, have fallen some 40 percent since the beginning of 2007. Approximately $1.4 trillion of commercial real estate debt matures in 2010-2014. Refinancing opportunities are very limited at present. Commentators state that lenders may find it necessary to absorb losses of $200-$300 billion. Currently, most real estate transfers are limited to foreclosures and acquisition of "distressed" properties. There is a shortage of comparable sales from which fair market values can be determined by lenders, borrowers, investors and entrepreneurs.
For over 125 years, Baker Donelson has guided its clients through every conceivable economic condition. For instance, our attorneys were on the ground when the Resolution Trust Corporation was a part of everyday conversation 20 years ago. Our cross-disciplinary approach is at its highest value in times like these. Creative solutions, crafted by more than 700 Baker Donelson attorneys and advisors, help our clients position themselves to reduce or avoid risks and maximize opportunities.
There is a lot on the line. This work requires a multi-disciplinary approach and attorneys who understand the details. Real estate law, title conditions, zoning and other entitlements, workouts, receiverships, bankruptcies, tax issues, regulatory rules, formation or dissolution of business entities, capital structures are part of the mix, but you must have someone with experience to know where the issues intersect.
Some of the assignments which our interdisciplinary team encounters include:
- Handling various matters of concern to CMBS loan servicers and borrowers.
- Representing purchasers and borrowers in connection with the sale of loans by the FDIC.
- Representing borrowers and servicers relating to the restructure of mature debt that cannot be refinanced.
- Giving advice concerning condominium projects and other buildings under construction.
- Restructuring landlord/tenant relationships to meet the needs of the parties.
- Seeking the appointment of a receiver in an effort to preserve rights pending settlement or foreclosure.
- Representing foreign and domestic private equity groups in the acquisition of real estate and related assets.
- Counseling clients on tax aspects of debt modification, the admission of new equity and other relevant issues.
- Providing assistance to avoid lender liability claims and, where necessary, defending against such claims.
- Reviewing and interpreting pooling and servicing, loan participation and intercreditor agreements, and mezzanine loan documents.
- Assessing mortgage debt, with a view to working out or foreclosing the obligations after the credit is acquired.
- Addressing the claims of parties in commercial real estate matters through alternative dispute resolution procedures.
- Identifying, monitoring, reporting and advising on key federal legislative, regulatory and policy developments affecting the commercial real estate and banking industries.