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ARTICLE · 12 DECEMBER 2023

Beware Amending A Lease Where There Is An Existing SNDA

Smith Gambrell & Russell
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Most commercial real estate leases are located on property encumbered by a deed of trust.

United StatesReal Estate and Construction
Linda S. Koffman
Linda S. Koffman
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Most commercial real estate leases are located on property encumbered by a deed of trust. The rental stream from these leases is a major factor in the lender's valuation of the real property as its security and its underwriting of the loan. The rental stream is also the borrower's source of funds to make its monthly loan payments to the lender. Before making the loan, the lender will review the existing leases to determine if those leases are acceptable to it and support the loan. The lender will also decide if it wants any of the existing tenants to subordinate their leases to the new loan and if it is willing to provide the tenant with a subordination, non-disturbance and attornment agreement ("SNDA").

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