Structuring Credit Tenant Lease Financing: Balancing Interests of Developers, Lenders, Tenants, and Investors

This CLE course will provide counsel with a review of the more nuanced aspects of credit tenant lease (CTL) financing as a financing vehicle. The panel will discuss structuring and documenting the transaction and meeting the interests of developers, lenders, tenants, and investors.

CTL financing is an attractive alternative to traditional real estate financing that may result in lower debt service and higher loan-to-value for owners and developers. CTL financing is suited for property leased to a single investment grade tenant under a financeable net lease.

Because the CTL structure is treated as a bond rather than a real estate loan for certain institutional investors' regulatory capital treatment, additional structuring and specific documentation are needed to satisfy the unique standards of these investors.

Listen as our panel discusses the advantages and disadvantages of CTL financing with a focus on structuring and documenting the transaction, including more specific focus on "special risk insurance," "residual value insurance," recourse carveouts in CTLs, and more.