LAS VEGAS—Commercial real estate lenders are finding new and creative ways that increase the likelihood a borrower would be personally liable on a non-recourse loan, according to a real estate finance attorney representing the buyer of an approximately 80,000-square-foot neighborhood shopping center here.
West hill, Inc. and Latin Real Estate. Inc. acquired the El Super Supermarket anchored shopping center located at 4215 East Charleston Boulevard in Las Vegas for $11.55 million. Tenants include Big 5 Sporting Goods, Taco Bell, and Wachovia Bank. The seller was a Los Angeles-based investor operating as Lamb Charleston LLC.
“We found and aggressively negotiated a significant reduction of contractual 'bad boy' carve-outs in the loan documents associated with the acquisition financing,” said Albert Valencia, a real estate partner in the Los Angeles-based transactional law firm Sklar Kirsh, LLP. “Borrowers may not find the security they are looking for in a non recourse loan if they ignore the growing laundry list of 'bad boy provisions' in their loan documents.”
“These carve outs typically protect the lender from illegal acts by the borrower, such as fraud,” according to Valencia. “Lenders are now more broadly defining the term, and actions such as failing to pay for labor or materials may make a borrower personally liable in the event of a default.”
Other members of the Sklar Kirsh team included Christina Degerman and Tina LeggBellossi.
Sklar Kirsh LLP counsels privately held and public companies, family offices, growing businesses and high net-worth individuals on legal and business matters that arise at all stages of the business and real estate life cycle.
LAS VEGAS—Commercial real estate lenders are finding new and creative ways that increase the likelihood a borrower would be personally liable on a non-recourse loan, according to a real estate finance attorney representing the buyer of an approximately 80,000-square-foot neighborhood shopping center here.
West hill, Inc. and Latin Real Estate. Inc. acquired the El Super Supermarket anchored shopping center located at 4215 East Charleston Boulevard in Las Vegas for $11.55 million. Tenants include Big 5 Sporting Goods,
“We found and aggressively negotiated a significant reduction of contractual 'bad boy' carve-outs in the loan documents associated with the acquisition financing,” said Albert Valencia, a real estate partner in the Los Angeles-based transactional law firm Sklar Kirsh, LLP. “Borrowers may not find the security they are looking for in a non recourse loan if they ignore the growing laundry list of 'bad boy provisions' in their loan documents.”
“These carve outs typically protect the lender from illegal acts by the borrower, such as fraud,” according to Valencia. “Lenders are now more broadly defining the term, and actions such as failing to pay for labor or materials may make a borrower personally liable in the event of a default.”
Other members of the Sklar Kirsh team included Christina Degerman and Tina LeggBellossi.
Sklar Kirsh LLP counsels privately held and public companies, family offices, growing businesses and high net-worth individuals on legal and business matters that arise at all stages of the business and real estate life cycle.
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