Closing Commercial Real Estate Loans Toolkit (TX)

Practical Law Toolkit w-005-1613 (Approx. 10 pages)

Closing Commercial Real Estate Loans Toolkit (TX)

by Practical Law Real Estate

Maintained • Texas

Resources to assist counsel for borrowers and lenders in understanding, negotiating, and closing a commercial real estate loan transaction in Texas. 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 Texas loan transactions, the borrower enters into a loan commitment letter with its lender to ensure that the lender will close 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 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 typical conditions and closing requirements that must be satisfied in a typical loan transaction, including legal opinions, consents, and tenant estoppel certificates.
The due diligence performed by lenders, including review of:
- the title and survey;
- leases;
- environmental reports; and
- the engineer's report.
The typical loan documents used in a commercial real estate loan financing in Texas.
Practical guidance on organizing the closing, including ensuring that the documents are properly executed and delivered.
Perfecting the lender's security interest.
Post-closing matters, including:
- preparing the closing binders;
- obtaining the title insurance policies; and
- recording the appropriate loan documents.

Closing Commercial Real Estate Loans Toolkit (TX) | Practical Law