Defeasance North of the Border, No Passport Required

mississauga ontario-resized-600.jpgThe Canadian real estate market has been an important part of our business since we started the defeasance consulting industry in 2000. As the first consultant to close a CMBS defeasance in Canada, we are proud of the work we’ve done and are excited to continue to lead the market in Canada.

This week we closed another Canadian defeasance in conjunction with the refinance of a retailCanada Defeasance property in Mississauga, Ontario.
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Tips for Negotiating Defeasance in Conduit Loans – Part 2

The “Payment Date” Definition:

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While it may seem like a minor detail, the wording of the “Payment Date” definition in a lender’s CMBS loan documents can have a big impact on the price a Borrower pays for the Defeasance Collateral when the Borrower sells or refinances. Ideally (from a defeasance standpoint), the Payment Date definition should state that a payment due on a Payment Date that is not a Business Day will be made on the immediately succeeding Business Day (not the immediately preceding Business Day).
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Self Storage Defeasance Volume Quintuples!

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Consolidation in the self storage industry has made the property type one of the most active in 2013. Already, year-to-date 2013 aggregate self storage defeasance volume is four times the full year 2012 defeasance volume. Commercial Defeasance helped fuel the boom this week by closing a $48 million, twelve property, self storage portfolio this week. Read more

Closed $4.8 Million Defeasance in 2 weeks!

Facilitating the sale of a Retail Property in Los Angeles, California to an all cash buyer, Commercial Defeasance coordinated the defeasance of the existing debt serviced by Midland Loan Services.

With a 2 week timeframe from engagement to closing, Commercial Defeasance’s knowledge and experience played a key role in pushing the transaction through the proper channels on an expedited basis without the client incurring additional expediting fees. The typical defeasance takes 30-45 days to close, but we always drive the process on our customer’s timeline. It’s amazing what can be accomplished when all parties work toward a common goal!
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Commercial Defeasance Closes $500K Defeasance

The existing debt was not set to mature until 2018, but with a current interest rate of 5.75% and principal balance of $450,000, the buyer recognized the opportunity to extend the term and re-leverage the asset at current rates.

While CMBS loans vary in size, rate and term, the defeasance requirements are very similar for all loans. The seller engaged Commercial Defeasance to facilitate the defeasance, because we bring the same level of service, experience and expertise on every deal, large or small.
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Commercial Defeasance Helps Borrower Through First Defeasance

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Helping a borrower through their first defeasance is always special for us.

No one had completed a defeasance when we started helping borrowers through the process back in 2000, so all we did for a while was help people through their first defeasance. Now, over half our customers are borrowers we have worked with before – some returning for their second and third defeasance on the same property! In just two weeks, we educated the customer on the process, got them comfortable with it, and closed their defeasance.
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Commercial Defeasance Closes New Deal

While Commercial defeasance is proud of its track record of bringing the same focus and commitment to a small defeasance that we bring to a complex defeasance, it is also the case that Commercial Defeasance brings the most defeasance experience in the industry to every single defeasance. Today was no different when Commercial Defeasance closed a $127,000,000 defeasance of five loans secured by 71 properties across 23 states.
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What is Defeasance? (The Cocktail Party Answer)

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Defeasance is an old legal term for a set of conditions in a document that, when fulfilled at a future date, render the effect of the document null and void. If something is defeasible, it is capable of being voided. If something is indefeasible, it cannot be voided.  For example, the Declaration of Rights of the Pennsylvania Constitution adopted in 1776 states:
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Tips for Negotiating Defeasance in Conduit Loans – Part 1

The “Defeasance Collateral” Definition In the past few years, some lenders’ CMBS loan documents have been revised to allow the defeasance collateral to include agency securities.  However, other lenders have been slow to adopt such a change even though REMIC regulations allow it.