Defeasance
We manage your defeasance end to end, independent of the servicer, dealer, and counsel.
Defeasance is a multi-party, document-heavy release of the loan where coordination prevents costly delays. We quarterback every party and ensure the securities pricing is low.
Defeasance is the most common way out of a fixed-rate CMBS or conduit loan. Rather than simply paying the loan off, the borrower substitutes a portfolio of government securities for the real estate as collateral. Those securities generate the cashflow to cover the remaining payments, and the property is released. It's a multi-party, document-intensive, and time restricted process with fees and securities pricing that can swing the total cost in ways borrowers don't see coming.
Pensford's defeasance team is truly one of the best in the industry. Their innovative approach and willingness to think outside the box have been instrumental in successfully completing our transactions. Their commitment to finding creative solutions sets them apart as a top choice for defeasance consulting.
Pensford quarterbacks the entire thing. We review the loan documentation, confirm the eligibility for defeasance, prepare the engagement documentation in coordination with the servicer, engage and coordinate every party, track documentation requirements, and ensure competitive securities pricing and fees, including negative-defeasance and no-premium situations, so you capture every dollar of value instead of leaving it on the table.