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Syndicated Commercial Real Estate Loan Transactions In Today's Market

By Richard S. Fries and Darby K. Brown
May 01, 2023

Larger commercial real estate mortgage loans are often originated by a group or "syndicate" of lending institutions that each contribute a portion of the overall loan proceeds and have been brought into the syndicate to share the benefits and risks of the loan. The loan is administered by an agent on behalf of the lender group, which agent generally has the relationship with the borrower and/or the largest stake in the loan. Sometimes the structure is a "loan syndication." This article describes several significant features of a "syndicated" real estate loan that are not commonly known or understood.

These considerations are timely as real estate sponsors are increasingly seeking to negotiate loan modifications and workouts with their lenders, only to find that the legal relationships among the lenders holding various stakes in the loan may make those negotiations more complex.

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