The permanent-loan market has experienced steady activity. Owners are seeking to take advantage of historically low interest rates to lock in medium-to-long-term financing for stabilized or near-stabilized projects. In addition to traditional permanent lenders such as insurance companies and CMBS lenders, many commercial banks have entered the market in an effort to offset the run-off in their construction loan portfolios. Private equity funds and real estate investment trusts have also entered the market in an effort to seek relatively high returns. Non-recourse or limited-recourse financing with favorable structures are currently available.
Troutman Sanders’ lawyers represent banks and borrowers in complex, heavily structured permanent loan transactions. Our extensive experience covers the negotiation of “bad-boy” indemnities, approved leasing provisions, holdback terms and conditions, permitted transfer provisions and interest-rate hedging arrangements in order to achieve an appropriate level or risk and flexibility on behalf of our clients.