Bulletin: Understanding Yield Maintenance

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


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Real Estate Case Study: Debt Ratio

Real Estate Case Study: Debt Ratio
Our Client:
A public real estate company specializing in asset management in the hospitality sector.
Situation:
Our client had paid down a significant portion of their floating rate line of credit, leaving them with a fixed/floating rate debt ratio higher than they desired. With hotel assets essentially re-pricing daily,


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Real Estate Case Study: Mezzanine Debt

Real Estate Case Study: Mezzanine Debt
Our Client:
A nationwide owner of hotels.
Situation:
Our client’s hotel portfolio was leveraged with a number of long-term low fixed interest rate loans. Since the origination of the original first mortgage debt, increases in operational efficiency for the portfolio resulted in improved portfolio cash flow. Our client’s desire


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Predictions

But what about financial markets? Surely there must be some model out there that can predict a bull from a bear?


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Defeasance Prepayment

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


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Regulatory Compliance

Derivative Compliance, foreign currency hedge, Foreign Currency Hedging, foreign currency hedging strategies

Compliance without compromising hedging
OTC derivatives continue to evolve in this era of financial regulatory reform. Dodd-Frank and EMIR regulation are now actively enforced. These new standards have increased complexity and rigor for real estate companies. They must manage derivative-related documentation, policies and resolutions, as well as risk management operations.
While the changes in effect


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Real Estate Case Study: Defeasance

Real Estate Case Study: Defeasance
Our Client:
A public real estate company that owns and manages over 600 retail operating and development properties worldwide.
Situation:
Our client engaged Chatham to assist as they used proceeds from a new securitized loan to partially defease existing secured debt. The securitization was designed to include a triple-A


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Yield Maintenance Calculator

Investment Banking Strategy

Investment Banking Strategies for the Real Estate Industry
The pursuit of the deal, whether acquiring an existing property or pursuing ground up construction, is what moves commercial real estate investors. And regardless of the property, be it Core or Value Add, or the property type, from Hospitality and Multifamily to Office, Industrial. and Retail, every


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Servicers, Lenders, Brokers,
Auditors and Counsel

Chatham’s expert advisory services and proprietary software solutions for real estate debt and derivatives not only serve global real estate investors, but also our clients’ key partners, including lenders, brokers, agency originators, auditors, loan servicers, and legal counsel.
Chatham collaborates among all partners to ensure details are in order for a smooth closing. This involves


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