What's Now in Real Estate Finance (May 2025)

Topics from our May agenda included:

Tenant Letters of Credit as Collateral 
Alyssa Rutherford (Los Angeles)

Lenders may require that, as collateral for the loan, the borrower delivers to the lender letters of credit required under the leases for the property. Additionally, in some instances, the lender may require that the letter of credit issuer consent to the collateral assignment. While in some cases this may be a straightforward request, different issuing banks and different groups within issuing banks tend to react differently to these requests. If the issuing bank is resistant to consenting to a collateral assignment of the letter of credit, a potential workaround is adding the lender as an additional beneficiary of the letter of credit and entering into an agreement between the borrower and lender that governs the rights of each party as co-beneficiaries during the term of the loan.

Tales From the Closing Room 
John Domby (Charlotte)

In the inaugural edition of Tales From the Closing Table, John Domby shared recent trends and traps for the unwary in closing CRE loans in the current economic environment.