Is Your Lease Financeable?

LOS ANGELES—Parties often enter into a lease with the thought that it is a temporary use of space by the tenant, frequently amounting to nothing more than an expense line item on the budget. That is according to Dina Tecimer and Michael Polentz of Manatt, Phelps & Phillips. “However, if a lease is structured properly, the tenant’s interest under a lease can be pledged to a lender as collateral for a loan.  This is especially appealing where the tenant plans on remaining in the building for a long period of time.”

Tecimer is a partner in the Real Estate & Land Use Practice Group located in the Los Angeles office and Polentz is co-chair of the Real Estate & Land Use Practice Group, located in the Palo Alto office. The views expressed on the subject in the column below are the authors’ own.