Hait Speaks to Law360 on the “Three Ways Property Deals Have Changed In Today’s Boom”
Louis Hait, Partner in Kaye Scholer’s Real Estate Group, was quoted in Law360 about how today’s current real estate market is changing the deal negotiation process. Hait spoke specifically to the increase in mezzanine lenders offering construction loans.
“Before 2008, I could probably count on one hand the number of mezzanine loans I did involving construction loans,” Hait said, noting that while mezzanine lenders often looked at those deals in the past, they rarely pulled the trigger due to the risk. “From what I’ve seen just over the last six to nine months, all of that has changed.”
According to Hait, “In today’s competitive market, where there is so much debt and equity capital available to real estate players, mezzanine lenders are chasing yields. And construction loans offer an opportunity for lenders to score healthy, 8 to even 12 percent yields.”
These deals, however, come with a number of complex issues that will have to be handled involving guaranties in inter-creditor agreements between the mortgage lender and the mezzanine lender, Hait warned.