KPPB LAW provides commercial real estate financing services. Given the complex nature of real estate, finance, banking and securities law, this field of law presents challenges for businesses who wish to structure their commercial real estate purchases in the most advantageous possible way. Our attorneys are highly experienced, and have a demonstrated history of success in managing commercial real estate finance matters.
Commercial Real Estate Finance Legal Services
KPPB LAW offers a full range of legal services in the field of commercial real estate finance, including,
- Acquisition and Development Loans
- Bridge Loans
- Construction Loans
- CMBS Loans
- Purchase and Sale Agreements
- Legal Opinions
- Loan Agreements/Lending Agreements
- Mezzanine Financing
- Security Agreements
- SBA Loans
Acquisition and Development Loans
An acquisition and development loan, known as an A&D loan, is a type of loan where part of the money is used to buy the property. The total cost for a project using an A&D loan includes the cost of the land, costs for improving or developing the land, interest and sales commission and a contingency reserve. Typically, developers are required to put up at certain percentage of the total value of the loan.
A&D loans involve multiple legal issues, including contract law, land use law, construction law, and finance law. An experienced law firm and its attorneys can assist a developer in obtaining an A&D loan by providing comprehensive legal counsel in each of these areas that will help to clear hurdles, avoid potential pitfalls and assist in the sale or lease of the property. This work could include negotiating the purchase of land, drafting purchase and sale agreements, assisting in acquisition and construction financing, performing title work, reviewing zoning laws, and drafting leasing agreements. Developers who work in close collaboration with an attorney when applying for A&D loans will often be able to obtain more favorable terms and move a project to completion faster.
Bridge Loans
Bridge loans are a type of short-term loan, typically used by commercial property owners to cover the time between selling one property and buying another. These types of loans require substantial amounts of documentation and compliance with loan requirements.
An attorney can work with a business or developer to obtain bridge loans. Utilizing a lawyer with expertise in the field of finance and banking law and skilled in negotiating will often result in more favorable loan terms for the borrower. This could include guiding commercial property owners through the loan approval process, as well as drafting and negotiating legal documents on the borrower’s behalf.
Construction Loans
Commercial construction loans are exactly what they sound like: loans that finance the construction of a commercial property. Unlike traditional loans, construction loans often have special requirements to ensure that borrowers can pay off the loans. This includes an analysis of how much the loan will cost and the anticipated profit of the commercial property.
When it comes to obtaining a construction loan, having an experienced commercial real estate financing lawyer by your side will help developers achieve their goals. An attorney can assist with the loan process, including negotiating the terms of the deal with the bank, and can also help developers in purchasing land for construction. Because construction loans are complex documents and often require adherence to a strict schedule, having an attorney review these loans documents and work with the bank’s inspector can assist developers in successfully completing their projects.
CMBS Loans
CMBS loans, or commercial mortgage-backed securities loans, are a type of commercial real estate loan that are secured by a first position mortgage on a commercial property. They are also known as Conduit Loans.
CMBS loans have a unique set of requirements that require knowledge of securities, finance, tax and real estate law. An attorney can provide practical advice for borrowers seeking CMBS loans, including information on structuring the initial loan, refinancing, recapitalization, loan modifications, pre-payments, restructuring, and foreclosure litigation. Because these loans are so involved, any borrower seeking a CMBS loan should consult with an experienced commercial real estate financing lawyer to ensure that the loan is approved and structured appropriately.
Legal Opinions
For any company or developer interested in purchasing commercial real estate, obtaining a legal opinion is often a necessary step. A legal opinion letter for the purchase of a commercial real estate property is written by an attorney on behalf of the borrower. The letter will address each of the lender’s requirements for financing.
In most commercial real estate transactions, the lender will request a legal opinion to demonstrate that the person or business is in good standing. The letter will also inform the lender that the financing terms and conditions are both valid and legally enforceable under the state law that governs the loan. Because these documents are required for most commercial real estate financing transactions, businesses seeking these loans must consult with an attorney to receive a legal opinion to move forward with the project. A seasoned commercial real estate financing lawyer can ensure that the opinion letter meets all the lender’s requirements so that the loan can be approved.
Loan Agreements/Lending Agreements
In its most simple terms, a loan agreement is a contract between a borrower and a lender, where each party makes promises. In the context of commercial real estate financing, loan or lending agreements can be highly complex documents.
While loan agreements can be made between any parties, in commercial real estate transactions, they are typically made between a business (the borrower) and a bank (the lender). The terms can be very complicated, involving hundreds of pages of documents that may include payment schedules, fees, lease approval issues, insurance clauses and more. Given the intricacy of these agreements, borrowers seeking commercial real estate loans should consult with a knowledgeable attorney to review, advise, draft or negotiate the terms of a loan agreement. Doing so will help to protect the borrower’s assets and will aid in the successful completion of a project.
Mezzanine Financing
Mezzanine financing is a short-term loan where a developer offers partial interest in his or her company as collateral for additional financing. These funds are often necessary to complete a project that has already been started and requires extra money to bring to completion.
Mezzanine financing is a particularly complex type of loan, as it is secured by an interest in a company rather than by assets. For developers, negotiating a mezzanine loan without experienced legal counsel would be inadvisable as these deals require a complete understanding of bankruptcy, tax, finance and contract law. An attorney can work with a developer to execute the client’s preferred exit strategy, administer mezzanine funds, negotiating and drafting relevant transaction documents, and providing advice on tax and structuring. Developers who utilize the services of a skilled commercial real estate financing attorney in the mezzanine financing process will save money and avoid risk through the careful structuring of the deal.
Security Agreements
A security agreement is a document that gives a lender a security interest in an asset that is offered by the borrower as collateral. If the borrower defaults on the loan, the lender can seize the collateral and sell it to satisfy the loan. For lenders, security agreements reduce the risk of commercial real estate loans by providing a way to recoup at least some funds that the borrower cannot repay. Collateral could include real estate, equipment, motor vehicles, inventory, investment securities or accounts receivable.
Security agreements are governed by the Uniform Commercial Code and require a detailed understanding of securities and finance law. An attorney can work with borrowers to negotiate and draft security agreements, and provide advice regarding the nature of the transaction. Utilizing the services of an experienced commercial real estate financing attorney will typically result in more favorable security agreement terms for the borrower.
SBA Loans
SBA loans, or Small Business Loans, are a type of financing available to some small business borrowers. They are offered through federal and state government programs and are usually available when a potential borrower cannot meet the requirements for a standard commercial loan. The government guarantees the loan, making it a more viable risk for the lender.
Using an SBA loan to finance a business is a complicated process, requiring a thorough analysis of the tax implications and assembling a business plan. For borrowers, an experienced attorney can advise on how to best obtain an SBA loan. For lenders, a lawyer can assist with navigating the complicated regulations governing these loans. This includes preparing the loan documents and performing due diligence and ultimately closing on the loan. The involvement of a knowledgeable commercial real estate financing attorney in the SBA loan process can make the transaction smooth for all parties.
Benefits of Our Commercial Real Estate Finance Legal Services
If you are interested in obtaining financing for a commercial property, whether it be a bridge loan, a CMBS loan, a construction loan or any other type of commercial real estate loan, you will need expert legal advice to help direct you through the process. Without an attorney, you will be at a serious disadvantage when it comes to analyzing the real estate, tax and financial consequences of these types of loans. KPPB LAW has extensive experience with commercial real estate financing law. We use our knowledge of this area of law to ensure the best possible result for our clients. Clients who entrust their commercial real estate financing matters to KPPB LAW can rest easy, knowing that our expert lawyers will guide and advise them throughout the transaction.
Contact KPPB LAW Today For Professional Legal Support
Our highly-skilled attorneys are ready to support our client’s commercial real estate financing needs. We can give you peace of mind, knowing that your legal issues are in good hands. Call our law firm today to schedule a consultation, and to learn more about your options for commercial real estate financing.
