Commercial Real Estate Lending as a Result of COVID-19
Impact of COVID-19 on Commercial Real Estate
As the COVID-19 pandemic continues to affect the US economy, commercial real estate lenders are feeling the results of a weakened commercial real estate market. Office buildings are suffering from higher rental unit vacancies, and industrial and retail properties are going out of business or reducing location expenses due to hard economic realities caused by the pandemic.
Many companies are finding it necessary and more cost-effective to have employees work from home or run their businesses remotely rather than through brick-and-mortar locations.
In addition, landlords of investment residential rental properties are also feeling the effects. Federal, State, and local governments across the country, in an attempt to ease the pandemic’s economic effects on renters, have instituted different forms of intervention such as eviction moratoriums for many tenant-occupied properties. This results in delinquencies in rental payments, which trickles down to mortgage delinquencies for the landlords who, without rental income, are finding it challenging to meet their mortgage obligation.
More than ever, commercial lenders are now faced with higher default rates on their investments and must decide how to mitigate this downturn in the market.
Our attorneys and staff at Fein Such Kahn & Shepard, PC have expertise in assisting commercial lenders mitigate defaulted loans and helping our clients navigate their options to determine the best course of action in dealing with the same. In some situations, foreclosure and collection efforts may be the best alternatives. In certain circumstances, the use of rent receivers may be appropriate. In others, loss mitigation products such as forbearance or repayment plans, loan modifications or extensions, deeds in lieu of foreclosure, short sales, or other workout options may be appropriate. In the event borrowers resort to bankruptcy protections, we strive to protect our clients’ creditor rights under the Bankruptcy Code.
FSKS prides itself in providing the highest level of service to our clients of our Creditors’ Rights practice in New Jersey, Pennsylvania, and New York at a reasonable cost. For more information, or if we can be of assistance, please contact us at (973) 538-4700 and ask for Vincent DiMaiolo, Jr., Esq. (firstname.lastname@example.org).