NEW YORK, Sept. 26 /PRNewswire/ — Just one month after opening an office in New York City, Commercial Defeasance, LLC coordinated the $800,000,000 defeasance of the General Motors Building in New York City. The need to defease the existing loan encumbering the property was triggered by a refinancing of the existing fixed rate CMBS debt by Deutsche Bank. The sky-scraper is located in Midtown at 767 Fifth Avenue.
Dawn Reinhardt, the Commercial Defeasance Deal Manager who worked on the transaction, said, “The defeasance of the General Motors Building was one of the largest defeasance transactions closed to date, which made it a complex and challenging assignment. The fact that the defeasance and refinancing closed on time in this market is a real testament to how well all of the parties to the transaction worked together.”
What is Defeasance?
Defeasance is a substitution of collateral for a commercial loan in which a portfolio of government securities replaces the real estate as the collateral. Redemption of principal and interest from the securities pays all remaining debt service. The promissory note technically remains in place but is repaid from the proceeds of the securities. The securities are typically purchased with a portion of the proceeds of a sale or refinance, so the defeasance transaction is often coordinated with a related real estate transaction. Nearly all fixed-rate commercial conduit loans originated since 1998 require a borrower to defease in order to sell or refinance.
About Commercial Defeasance, LLC
Commercial Defeasance, LLC is the market leader in the defeasance of commercial real estate loans. The company actively manages all aspects of the 30 day defeasance process, so borrowers and their attorney and broker can focus on the related real estate transaction with confidence that the defeasance will close on time. Since 2000, the company has facilitated thousands of defeasance transactions nationwide for all property types from million dollar single loan transactions to billion dollar multi-loan transactions coordinated with multiple loan servicers and rating agencies to close on the same day. For more information or a free defeasance cost estimate, please visit http://www.defeasewithease.com or call 1-800-624-4779.
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SOURCE Commercial Defeasance, LLC
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