COVID-19 Commercial Real Estate Information

The commercial real estate market is in turmoil as the long-term effects of COVID-19 remain unknown.  According to recent loan performance data, most borrowers are still making their loan payments from cash flow, available funds, or the repurposing of available reserve funds; however, significant headwinds remain.

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While many loan servicers and lenders are able to offer some form of assistance to borrowers who are experiencing hardship, relief has been uneven and varies greatly on type of lender – CMBS, portfolio, or agency loan. Furthermore, as the pandemic rages on and short-term forbearances expire, lenders and servicers will be confronted with lingering issues which left unaddressed, can deepen into a crisis.

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Borrowers should continue to make their loan payments if at all possible, to keep the loan in good standing, and be proactive in addressing the situation. Unlike government sponsored or agency loans, not all servicers are bound to a single form of relief.

 

Typical Supporting Documentation:

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Current and prior year property financials

Current rent roll

Current delinquency report

Business plan update and property conditions

Post- closing obligations update (if expired or incomplete)

Tenant base analysis and outlook

Letter of explanation for relief request, including plan for stabilization

Processing fee and/or legal fee

 

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