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Freddie Mac catalyzed the transition to SOFR as the alternative to LIBOR late last year, and already many lenders have followed suit. By the end of the year, it is likely that most lenders will have adopted SOFR language in their loan documents, and borrowers should note the adjustment. Both current borrowers and owners with existing loans could see the change.

“On new loans and certain loan modifications, borrowers can expect to see new alternate index language in their loan documents,” Jennifer Bojorquez at Troutman Sanders tells GlobeSt.com. “We’ve been notified by several lenders in recent weeks of the inclusion of revised alternate rate provisions on new loans and on modifications involving maturity date extensions or payment terms.  On existing loans, and again depending on the terms in the loan documents, borrowers should not be surprised to receive notification from their lenders that their loans are being transitioned to SOFR or that the loan documents need to be modified to address LIBOR termination.”

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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