From simple credit cards to commercial lending, banks are besieged by requests to rework loan agreements because of unprecedented economic circumstances. The hospitality and office markets have been affected unusually hard and represent a high percentage of those requests. With so many looking for forbearance, lenders are carefully examining terms to decide with whom they will work.
Many see this as an opportunity to relieve themselves of some particularly troublesome agreements they were obligated to accept to secure a loan and feel they may have the upper hand in a turbulent market. However, according to Bert Haboucha of Atlas Capital Advisors, lenders are especially hesitant for wholesale restructurings given the uncertainty presented by the pandemic.
Leslie Lundin, Managing Partner at LBG Real Estate Companies, urges to borrowers not to go in asking for everything when they just don’t need it. Be realistic about the extent of relief they can get. If you are too far apart from what you’re asking and what the lender is willing to provide, you will be put aside until the next go-around.
Right now, the markets are “iffy.” With a virus for which we may or may not have a vaccine, together with an election that could have further economic consequences, lenders are unsure of how to value properties. Whether they take the chance and wait or negotiate now, is all about how you package your offer.