Arent Fox has represented borrowers, lenders, and other loan participants in loan modifications, payment deferral, and other forbearance arrangements, intercreditor agreements and other workout arrangements with respect to virtually every kind of real estate collateral.

Our real estate attorneys continuously represent many of the most active and sophisticated developers, owners, investors, and lenders in the real estate industry, across virtually every sector and project type. As a result, we understand how real estate participants operate their businesses, not just how to structure and negotiate their individual projects, and we have unparalleled credibility and access to financial institutions and other market participants. These assets are invaluable to us in workout situations, where bringing a project into compliance in the most cost-effective manner often requires a great deal more than simply modifying the economics of an individual loan.

We take a comprehensive and creative approach, exploring a broad range of options for reducing the borrower’s costs in lean times – for example, providing advice as to the use or prepayment of all of borrower’s existing lines of credit (not just the ones in default) and evaluating and adjusting real estate occupancy costs and other organization wide expenses. We also design specific measures to minimize or avoid costs associated with the workout transaction itself, such as breakage fees that could result from the termination of swaps, caps, collars, and other interest rate hedge instruments.

Even if bankruptcy is not an imminent threat in a lender representation or an attractive option in a borrower representation, the possibility and implications of bankruptcy proceedings drive several aspects of any workout transaction, and our real estate attorneys work closely with bankruptcy specialists throughout the process. Arent Fox’s Tax practice group also plays a crucial role, particularly where a restructuring or recapitalization of the borrower or an upstream entity is involved, or where the economic terms of the workout implicate gain realization issues or present opportunities to defer or avoid income or capital gains.