From conventional to complex, our real estate lawyers help you structure and negotiate your financing options.

Commercial real estate financing can be complicated as it incorporates various financing structures, lenders, loans, and borrower and investor needs, and goals, not to mention the continually shifting market trends and lending requirements. In today’s economy, you need an experienced real estate attorney to know that you are getting the most out of your real estate finance structures and negotiations.

Our real estate attorneys at Moschetti Law Group have experience in all facets of real estate finance, and our Managing Partner even holds an MBA and has additional expertise as a commercial real estate broker and financial analyst. We have represented lenders, borrowers, and investors, and you can trust that we truly keep your interests at the heart of every document we draft or review. Contact us today to schedule a no-obligation strategy session to discuss your real estate financing.

Our expertise includes structuring, negotiating, documenting, and closing:

Conventional loans

Conventional real estate loans are any loans offered by a private lender. These usually have higher fixed interest rates than loans provided by the government. These loans generally require the borrower to have a very high credit score and low debt-to-income ratio. For commercial real estate loans, lenders look for a loan to value ratio of 75-80% or a debt service coverage ratio of greater than 1 (meaning that your business will be able to pay its annual debt expenses after taking on this loan). You may also be required to make a personal guarantee on the loan, making you personally liable for payments should your business be unable to support them. These loans also have conditions on their repayment schedules and typically do not let you pay them off early without penalty. Moschetti Law Group successfully helps businesses find the best conventional loan option for their situation and ensuring that you understand the fine print and how it affects your bottom line before you sign.

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Construction loans

Construction loans are used to finance building or renovations projects in real estate ventures, and they can include commercial construction and land development. These are short-term loans, often with terms lasting only twelve months, that the borrower can then roll into a mortgage or another long-term loan. Some are disbursed in increments, and you are only required to pay taxes on the amount you have borrowed to date. With such high-risk, fast-paced loans, it can be helpful to have an experienced real estate attorney on your side to help you make the soundest financial decisions and take only the most calculated risks.

Loans secured by ground leases

Ground leases allow a tenant to develop real estate while only leasing the land they are developing on. These have various benefits to both the landowner and the tenant, as the property will likely realize a substantial increase in value by the end of the lease term. The tenant will have a lower barrier to entry with regard to the cost of purchasing land on which to develop. When lenders are considering a loan for ground leases, they must consider the cost-to-value of the proposed development on that particular land, market values and rent escalation trends in the area, and how refinancing at the end of the loan term will affect repayment. Moschetti Law Group can help you determine if the loan is a sound financial move for you and negotiate terms that make your ground lease plans possible.

Multi-state, multi-asset, cross-collateralized, and cross-defaulted loans

These loans leverage multiple assets from the borrower. These might be properties across more than one state, more than one asset used as collateral for the same loan, or more than one loan using the same asset as collateral. Such loans may include provisions for default such that should the borrower default on one loan, he or she must relinquish multiple cross-collateralized assets. The potential for complexity and confusion is evident in these types of loans, and the dedicated review by one of our experienced attorneys can be your peace of mind.

Letter of credit-supported financings

Letters of credit are provided to sellers as a guarantee from the buyer’s financial institution that they will be paid whether or not the buyer is ultimately able to make those payments. These letters have become instrumental in international real estate dealings, and often the bank or financial institution will make the payments directly to the seller in these cases.

Securitized financings

Securitized assets have been grouped by the issuer and sold to a third-party investor for a lump sum. This process can generate liquid capital at the moment where it would have otherwise been limited by monthly repayments, in the case of mortgages or auto loans. Our attorneys can advise you on the most salient real estate financing options and whether securitized financings are right for you.

Sale/leaseback transactions

When a business owns a high-cost property and runs into a situation where they need access to the capital they have invested there, a sale-leaseback transaction can be advantageous. In these instances, the business sells the property and then leases that same property from the new owner, usually for an extended period. Moschetti Law Group understands the benefits and considerations of cash flow and investment tradeoff and can advise you on your best course of action.

Make informed decisions about your real estate transaction or syndication.

Contact our Calabasas, CA real estate and business attorneys today!

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Mezzanine financings

This combination of debt and equity financing allows companies to generate capital for specific projects or a new acquisition. It is higher risk, but also generates greater returns, and in the case of default, mezzanine financing allows the lender the right to convert to equity financing. Let our attorneys, experienced real estate financing, help you determine if mezzanine financing is right for your business.

Inter-creditor agreements

In the case that a borrower must procure financing from more than one lender, those lenders will sign an inter-creditor agreement to protect their interests in the joint financing of the venture. The roles of these creditors will be divided into a senior lender and a junior lender to distinguish responsibilities and division of assets should the borrower default. There must be careful review and negotiation in these agreements in order to avoid any misunderstandings in definitions and terms—a job you can confidently leave in the hands of our experienced real estate attorneys.

Loan participations and other co-lender arrangements

Lenders may enter into a loan participation agreement in which a second lender “participates” by purchasing an economic interest in the loan or loans. The terms dictate the rights and responsibilities of each lender in the collection of principal and interest on the loans. In some cases, the participant buys the entirety of the economic asset from the original lender, although the original lender maintains the contractual agreement with the borrower of the loan.

Interest rate protection products

Interest rate protection may come in the form of a rate swap, cap, or collar designed to protect the borrower. Interest rate fluctuations can have a significant impact on your bottom line, so interest rate protection products help mitigate that risk. The attorneys at Moschetti Law Group are familiar with all the products available to you and can advise you on the best option for your bottom line.

Bond financings

Bond financing is used to raise capital for large projects by selling bonds to investors. The seller must pay back those bonds plus interest over the long term. These bonds can have a fixed or variable rate structure and a guaranty from a municipal bond insurance company. Bond financings can be very cost-effective for projects requiring a substantial amount of capital. Moschetti Law Group’s experience in real estate financing gives you insight into the potential benefit of bond financing for your real estate project.

Finally, in the case that your business is experiencing difficulties with a property, the attorneys and financial experts at Moschetti Law Group will partner with bankruptcy and litigation experts to build a customized strategy for you. We can also advise investors and loan participants throughout their review of potential loan and asset acquisitions.

If you need an attorney to help you with commercial real estate lending or to understand your rights and obligations in a real estate finance contract, set up a free, no-obligation strategy session by clicking here or calling us at 818-696-5007.

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