Chatham Financial Offers Enhanced Defeasance Solutions With an unprecedented number of CMBS loans maturing in less than two years, new online defeasance calculator provides commercial real estate owners a high level of functionality in initial evaluation of defeasance options July 7, 2015 (Kennett Square, PA, USA) – Chatham Financial, an independent full-service advisory and technology solutions provider, has unveiled an enhanced suite of defeasance services to correspond with a time of dramatically increased defeasance activity. With over 22,000 securitized loans coming due between now and December 2017, Chatham Financial’s professionals are well positioned to provide clients with holistic solutions to their specific transaction needs. An accessible example of Chatham Financial’s defeasance capabilities is its updated defeasance calculator, which offers an easy-to-read cost estimate report and now encapsulates cost sensitivity to Treasury yield movement and the exclusive ability to forecast Treasury…

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Best Practices for Executing a Defeasance A successful defeasance requires the timely execution of a number of critical steps. Having an expert on your side is essential to ensure the defeasance is executed properly and fairly. Chatham’s defeasance consultants will help you navigate the process and will ensure you receive the best terms, market standards, and a fair cost. To help you understand borrower requirements and to illustrate how Chatham can assist with your defeasance, the following guide outlines the critical steps involved in a defeasance transaction: Printer-Friendly Version

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When deciding to prepay your fixed rate CMBS debt, whether through yield maintenance or defeasance, most borrowers have questions. Here are a few of the more common ones, but if you have others, or just want to talk to a defeasance expert, don’t hesitate to contact us.

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Best Practices for Executing a Defeasance A successful defeasance requires the timely execution of a number of critical steps. Having an expert on your side is essential to ensure the defeasance is executed properly and fairly. Chatham’s defeasance consultants will help you navigate the process and will ensure you receive the best terms, market standards, and a fair cost. To help you understand borrower requirements and to illustrate how Chatham can assist with your defeasance, the following guide outlines the critical steps involved in a defeasance transaction. Download This Bulletin

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Defeasance Frequently Asked Questions When deciding to prepay your fixed rate CMBS debt, whether through yield maintenance or defeasance, most borrowers have questions. Here are a few of the more common ones, but if you have others, or just want to talk to a defeasance expert, don’t hesitate to contact us. 610.925.3120 Download Defeasance FAQs

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Understanding Yield Maintenance Both yield maintenance and defeasance allow borrowers to unencumber the underlying real estate asset. However, from a legal and economic perspective, the two processes are fundamentally different. Yield maintenance is the actual prepayment of the loan. Defeasance on the other hand entails a substitution of collateral and assumption of the loan by the Successor Borrower. Download This Bulletin

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What a Borrower Should Know Before Defeasing Defeasance is the process through which a borrower is released from the obligations of its debt. The borrower purchases a portfolio of government bonds to serve as replacement collateral for the debt and to generate the cash flows required to meet the future obligations of the debt. While the process can be summarized in a few lines, in practice it is very complex, involving a large number of parties with competing interests. Having an independent, experienced advisor on the borrower’s side is important to ensuring an on-time, cost-effective, and complication-free close. Download This Bulletin

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The air travel transportation network is amazing. In the US alone, some 2 million passengers board more than 30,000 flights every day. Any given flight can seat us with hundreds of travelers coming from different locations and heading to various destinations. When we do finally arrive, we stand at the baggage carousel expecting our luggage to trundle by without typically giving much thought to just how remarkable it is that our bags managed to pass every screening point and make every connection in time to meet us at baggage claim. The fact that only 0.5% of all bags end up unclaimed, and that airlines are able to eventually return the majority of these bags is pretty amazing. Kudos to you, airlines. But despite this impressive track record, there is still a fair amount of luggage that is never reunited with…

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Ever notice how many more things come in clear packages at the grocery store? Gone are the days when juices, granola, and frozen pizzas languished in those opaque cardboard containers; now we can see right through most packages to the delicious goodness inside. Why reveal so much all of a sudden? As Sarah Nassauer recently wrote in the Wall Street Journal, it turns out that brand managers discovered in testing that transparent packaging promoted the perception of better taste and fresher ingredients among consumers. Tropicana used to dominate orange juice sales, but it lost share to Simply Orange once the challenger was first to market with a clear bottle – Tropicana has not recovered its fallen sales, but perhaps to prevent further attrition it has adopted the clear jug approach. How significant is see-through packaging to sales? Kind Healthy Snacks…

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Expertise in Defeasance and Prepayment Defeasance and Yield Maintenance are two alternatives that real estate borrowers may consider for paying off existing debt. Yield Maintenance is an actual prepayment of a loan. It is most common in agency loans and those originated by balance sheet lenders. Defeasance is the substitution of collateral and assignment of debt and is mostly seen in securitized, CMBS debt. As a real estate investor considering prepayment terms or defeasance – whether it’s to restructure a loan and exit from current debt – questions of cost versus flexibility and overall benefits versus penalty are common. The Defeasance Team at Chatham Financial has paved the way for transparent defeasance services since 2000. With more than 1,000 defeasances totaling more than $28 billion on behalf of clients, Chatham has navigated a wide range of defeasances, from $2 million…

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