Manatt's Michael Polentz, co-chair of the firm's Real Estate and Land Use practice, and partner Dina Tecimer discuss with GlobeSt.com how to structure leases so the tenant is able to obtain financing.
"If a lease is structured properly, the tenant's interest under a lease can be pledged to a lender as collateral for a loan," said Polentz and Tecimer. "This is especially appealing where the tenant plans on remaining in the building for a long period of time."
Assuming the economics of the lease make the tenant's interest valuable, the lease provisions that Polentz and Tecimer discuss should be carefully considered from a legal perspective. When structured properly, such provisions can affect the tenant's ability to obtain financing, therefore leveraging operating cash.
Read the article here.