A Flood of CRE Litigation Could Be On the Way

This is the calm before a litigation storm, according to Sean Gaffney of Crosbie Gliner Schiffman Southard & Swanson. A flood of CRE litigation could be on the way next year. Loans and leases can only be restructured for so long before they result in defaults, which will in turn trigger litigation.

“The coronavirus pandemic has had such pervasive effects on both the commercial and residential real estate markets that the vast majority of landlords, lenders, and business owners have worked in good faith to offer substantial concessions to tenants and borrowers,” Gaffney, a partner at CGS3, tells GlobeSt.com. “However, loans and leases can’t be restructured indefinitely and with the market showing unexpected strength in terms of long-term valuation, there will inevitably be a wave of defaults that will manifest in litigation.”