Two Firms Partner On CMBS Workout Processing

al commercial real estate investment banking firm George Smith Partners (GSP) and national law firm Manatt, Phelps & Phillips LLP (Manatt) have joined forces to offer a legal and financial advisory platform to advise and assist borrowers facing commercial mortgage-backed securities (CMBS) defaults. George Smith Partners will assemble both market- and property-specific data to formulate workout plans in consultation with clients, and Manatt's legal team will review loan documents to determine loan terms and legal statuses of loans. Manatt will also obtain and analyze the securitization documents in order to understand the workout constraints on the servicer, with the goal of incorporating all of this diligence into the final workout proposal. The two companies will work side by side during workout negotiations with the servicer and negotiate final workout documents on behalf clients. "This new collaboration with Manatt is a proactive effort on behalf of both firms to meet a fundamental need in the commercial real estate industry," says Gary M. Tenzer, co-founding principal and senior director at George Smith Partners. "In 2009 alone, the wall of maturity on more than $15 billion in securitized loans with major international investment banks is rapidly approaching with no apparent refinancing opportunities; in 2010 and 2011, the maturities grow to $45 billion and $65 billion, respectively. As part of the workout process, the companies will consider note modifications, refinancings or outright note purchases. "The key will be to craft a workout that addresses the challenges of the underlying property, the economic motivations of the players and the contractual limits on the servicer's discretion," says Clayton Gantz, a partner at Manatt. SOURCES: George Smith Partners,


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