2021 Unwinding a Commercial Real Estate Transaction Gone Bad, Part 2

Original program date 7/28/2021

When a real estate project goes bad for whatever reason – sales are slow or at prices below projections, leasing is slow, or there are extensive cost-overruns or regulatory delays – developers, investors, lenders, and others are left scrambling to restructure the project and salvage any value or at least limit losses. This often involves restructuring or possibly refinancing a loan.  It may also involve additional equity.  Another option is selling the project, if possible.  These processes can be complicated by the nature of the investors and lenders involved.  This program will provide you with a practical guide to restructuring troubled real estate projects. 

Day 1

• Practical strategies for unwinding real estate deals outside of bankruptcy or litigation
• Negotiating, structuring and drafting the restructuring of failed real estate projects
• Underlying economics and tradeoffs of real estate restructuring
• Types of sellers and their impact on restructuring – individual owner, institutional, joint venture, private equity
• Complications and limitations involving syndicated loans, CMBS loans, and REMICs
• Navigating seller issues – personal guaranties, ongoing management fees, upside participation, reputation

Day 2 

• Restructuring alternatives, including straight purchases, “Loan to Own,” rescue capital/preferred stock/securities
• Drafting forbearance and loan modification agreements
• Receivership of distressed properties and planning to emerge from receivership
• “Loan to own” strategies and limitations
• Tax issues, including cancellation of indebtedness and restructuring recourse indebtedness
• Potential loss of valuable tax attributes and tax planning opportunities

Note: This material qualifies for self-study credit only. Pursuant to Regulation 15.04.5, a lawyer may receive up to six hours of self-study credit in a reporting year. Self-study programs do not qualify for GAL Certification, ethics, elimination of bias or Kansas credit.