Commercial Defeasance Coordinates 54 Loan Defeasance for Affordable Residential Communities, Inc.

CHARLOTTE, N.C., Sept. 26 /PRNewswire/ — Commercial Defeasance, LLC coordinated one of the largest and most complex defeasances to date for Affordable Residential Communities, Inc. The defeasance encompassed 205 properties across the country and 54 loans that were coordinated with five different servicers. The total amount of the defeasance exceeded $665,000,000.

Joe Parry, the Commercial Defeasance Deal Manager who worked on the transaction, said, “Coordinating the defeasance of 54 loans to close on the same date was a very complex and time consuming procedure that required the cooperation of all parties.” Scott Gesell, Executive Vice President and General Counsel of Affordable Residential Communities concurred: “Joe Parry and his team at Commercial Defeasance did an outstanding job in ensuring that this transaction was ready to go on time. We had an aggressive closing schedule and the defeasance piece of the process was one that was concerning to all of us, but Joe and his team made it seem straightforward and kept things on track throughout the process.”

What is Defeasance?

Defeasance is a substitution of collateral for a commercial loan in which a portfolio of government securities replaces the real estate as the collateral. Redemption of principal and interest from the securities pays all remaining debt service. The promissory note technically remains in place but is repaid from the proceeds of the securities. The securities are typically purchased with a portion of the proceeds of a sale or refinance, so the defeasance transaction is often coordinated with a related real estate transaction. Nearly all fixed-rate commercial conduit loans originated since 1998 require a borrower to defease in order to sell or refinance.

About Commercial Defeasance, LLC

Commercial Defeasance, LLC is the market leader in the defeasance of commercial real estate loans. The company actively manages all aspects of the 30 day defeasance process, so borrowers and their attorney and broker can focus on the related real estate transaction with confidence that the defeasance will close on time. Since 2000, the company has facilitated thousands of defeasance transactions nationwide for all property types from million dollar single loan transactions to billion dollar multi-loan transactions coordinated with multiple loan servicers and rating agencies to close on the same day. For more information or a free defeasance cost estimate, please visit www.defeasewithease.com or call 1-800-624-4779.

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SOURCE Commercial Defeasance, LLC

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