While many lenders are looking for any hint of poor financial health among borrowers, those looking for funds might also look under their lender\u2019s hoods. Or so office owner and developer Thomas Properties Group discovered during a recent complex transaction. Thomas Properties and some partners completed a debt restructuring for a portfolio of office buildings in Austin, replacing a $100 million unfunded commitment from Lehman Brothers Inc. with a $60 million priority credit facility that the ownership group will use for lease-up costs and property improvements.Lehman Brothers, whose bankruptcy last September shook the financial world to its core, owned half of the 10-building portfolio and provided debt financing to the other partners, in addition to its $100 million commitment. And $80 million in existing debt that the group secured was retired to reduce overall leverage on the portfolio.The transaction may be a harbinger of things to come, as the balance sheets of many large lenders may be of questionable durability. \u201cThis is new, in my experience: a case where a commercial property lender failed to meet its funding obligations,\u201d said Cox Castle Nicholson L.L.P. partner Douglas Snyder, who worked on the transaction. \u201cThis is a role reversal, as the lender is the party in default.\u201dThis kind of transaction raises such questions as whether the borrower is still required to pay interest if a lender ceases to provide financing. Ultimate resolution of these issues will likely prove time consuming, as communication between lender and borrower has become tougher now that so many recent-vintage loans have been securitized, Snyder said. \u201cThese days, loans are chopped up and sold off in pieces,\u201d he observed. \u201cMany borrowers and lenders have no relationship.\u201dFor more on hard-to-finance deals, visit www.cpnonline.com\/search and enter \u201cHistoric Solution\u201d and \u201cCondo Bet\u201d in quotation marks.<\/p>\n","protected":false},"excerpt":{"rendered":"
While many lenders are looking for any hint of poor financial health among borrowers, those looking for funds might also look under their lender\u2019s hoods. Or so office owner and developer Thomas Properties Group discovered during a recent complex transaction. Thomas Properties and some partners completed a debt restructuring for a portfolio of office buildings…<\/p>\n","protected":false},"author":1314,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21825],"tags":[],"class_list":["post-1003971047","post","type-post","status-publish","format-standard","hentry","category-finance"],"acf":[],"yoast_head":"\n