Borrowers Get Tips on Extending, Not Pretending

LAS VEGAS-For borrowers who have retail property loans in distress, the time might be ripe for some serious negotiations with lenders that go beyond the “extend-and-pretend” that has been a mantra of the commercial real estate lending world for the past several years. Panelists at RECon, ICSC’s annual conference at the Las Vegas Convention Center Sunday outlined some steps that borrowers can take to show lenders that they are serious about curing under-performing loans—and the panelists suggested that banks may be more receptive to such discussions these days.

“Bring reasons, not excuses,” was the advice from attorney Andrea Ascher, a partner with Proskauer Rose in New York City. Ascher explained that lenders, in order to have productive discussions with borrowers about restructuring or extending loans, don’t just want to hear borrowers blame the economy and circumstances outside of their control for their underperforming loans―they want to hear a plan for improving performance at the property as part of a negotiation about how to bring the loan back into compliance. “Lenders want to see borrowers who come in and are not pretending, but who have a plan for correcting” the situation, Ascher said.