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Commercial Litigation Landlord Tenant Law Litigation

Commercial Real Estate Lenders Face Remedy or Relief Decision In COVID-19

Lenders in default scenarios face a choice of whether to exercise remedies and take over their collateral, or offer relief measures to their borrowers, either in the form of short-term forbearance or a permanent loan modification.


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As the COVID-19 pandemic continues to place enormous stress on the commercial real estate industry — with hotels and shopping centers shuttered or experiencing depressed occupancy, urban apartments losing tenants and the lack of federal stimulus — an increasing number of commercial real estate loans are facing current or impending borrower defaults. The second quarter of 2020 reportedly saw a 65% increase in the overall delinquency rate for commercial real estate loans over the prior quarter, and upwards of $26 billion in commercial real estate loans have been downgraded to a rating of CCC or lower by a credit agency as of the beginning of September.

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