Real Estate

Introduction Real estate owners are prime estate planning candidates. Without proper planning, an owner’s family can be left to pay significant estate tax without liquid assets to make the payment. Even though that tax can often be paid over a 14-year period, the cash flow needed to make those tax payments can significantly reduce cash available to provide for the family. Also, real estate owners often spend much of their careers accumulating prime real estate assets that are irreplaceable. If such assets need to be sold to pay estate tax, the owner’s efforts in putting together a prime real estate…
Introduction In light of significant deterioration in cash flows and asset values in many classes of real estate caused by the COVID-19 pandemic, many real estate lenders are finding some of their otherwise well-underwritten loans to be non-performing. The capital markets are generally not open for hospitality and retail properties and, with respect to other property types, debt financing is only available if there is relatively low leverage, significant debt service coverage and strong sponsorship. Adding fuel to the fire, a number of debt funds, mortgage and other hybrid REITs need to raise liquidity in order to satisfy margin calls,…
The COVID-19 pandemic has been wreaking havoc on the economy generally, and with respect to many asset classes of real estate, specifically, and the general consensus now is this unfortunate situation will not abate for some time in the future. Not surprisingly, with businesses closed, employees furloughed, and revenue streams severely challenged, many owners of real estate and their tenants are simply not making rent and debt service payments. When that happens, the value of the real estate is reset, leaving the equity and possibly some of the debt impaired. When fighting for survival it might seem like tax considerations…