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Closing Commercial Real Estate Loans Toolkit (NY)
Practical Law Toolkit w-004-9239 (Approx. 15 pages)
Closing Commercial Real Estate Loans Toolkit (NY)
by Practical Law Real Estate
| Maintained • New York |
Resources to assist counsel for borrowers and lenders in understanding, negotiating, and closing a commercial real estate loan transaction in New York. This Toolkit contains many ancillary documents commonly used in closing a commercial real estate loan transaction and related to post-closing matters.
Commercial real estate financing is used to acquire, develop, or improve commercial real property. In typical New York loan transactions, the borrower enters into a loan commitment letter with its lender to ensure that the lender closes the loan on the terms and conditions contained in the commitment letter. The basic terms of the loan are typically agreed to in a term sheet attached to the commitment letter.
Before lenders disburse a loan to a borrower, there are typically many conditions precedent in the term sheet that must first be satisfied (or waived by the lender). The extent and nature of these conditions, and the complexity of the closing process depend on several factors, including:
- The size and nature of the transaction.
- The nature and creditworthiness of the loan parties.
- The existence, scope, and location of the collateral.
This Toolkit contains continuously maintained resources to provide information on:
- The most common types of real estate loans.
- The conditions and closing requirements that must be satisfied in a typical loan transaction, including:
- legal opinions;
- consents; and
- The due diligence performed by lenders, including review of:
- the title and survey;
- the leases;
- the environmental reports;
- the engineer's or the property condition report;
- the zoning for the property; and
- the property insurance.
- The typical loan documents used in a commercial real estate loan financing in New York.
- Practical guidance on organizing the closing, including:
- ensuring that the documents are properly executed and delivered;
- perfecting the lender's security interest;
- recording the appropriate loan documents;
- minimizing mortgage recording taxes in New York; and
- obtaining the lender's title insurance policy.
- Post-closing matters, including:
- the assignment of a mortgage;
- the partial release of a mortgage; or
- the satisfaction of a mortgage; and
- the preparation of the closing binders.