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Key takeaways

• As a result of the severe impact of the COVID-19 pandemic, many property owners are seeking relief from their lenders. Modifying loans that have been sold in the capital markets as commercial mortgage-backed securities (“CMBS”) can be costly and time-consuming and there is no guaranty that a satisfactory result will be achieved.
• In this client update, we have highlighted some of the unique challenges and issues faced by CMBS borrowers in connection with seeking a significant loan modification, including understanding the roles of the master and special servicers, avoiding trigger recourse liability, managing the significant fees that will likely be charged by the special servicer and satisfying the contractual and regulatory requirements.