In a market experiencing unprecedented change, parties involved in high-stakes real estate deals need a steady, trusted hand to guide them. The Paul, Weiss Real Estate Practice leverages a history of executing every kind of real estate property transaction and unparalleled business and legal acumen to help the most complex projects succeed amid volatile economic conditions.
Transactional Real Estate: The Role of Defeasance in Real Estate Finance
July 13, 2015 download PDF
Real estate partners Mitchell Berg and Peter Fisch published their quarterly Transactional Real Estate column in the July 8 issue of the New York Law Journal. The article, "The Role of Defeasance in Real Estate Finance," discusses defeasance, a common a feature in real estate finance (in particular in CMBS loans), which allows a borrower to effectively prepay a loan that is not by its terms prepayable. In a defeasance, the subject loan remains outstanding but Treasury securities and similar collateral are substituted for the real estate collateral, which allows the real estate collateral to be sold or refinanced. Real estate associate Shawn Fetty and John Ahearn, a consultant at Defease with Ease, assisted with the preparation of this article.