Real Estate Advisory Group
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James Liddiment, Managing Director in Duff & Phelps’ Real Estate Advisory Group, spoke to Estates Gazette about the impact coronavirus (COVID-19) is having on the real estate industry and lenders’ flexibility on debt covenants.
James commented, “As the effects of the coronavirus are felt across the real estate industry, lenders have been faced with a deluge of inquiries from commercial borrowers negotiating covenant waivers.”
James added that Duff & Phelps is hearing “lenders are supporting their borrowers during this extremely sensitive time by agreeing to capital repayments and/or interest payment holidays, extensions where required and allowing other waivers across debt service covenants. As a result, we expect a reduction in loan enforcements in the short term.”
James suggests “greater difficulties could lie ahead, particularly if the hiatus of transactional, construction and business activity continue into, and beyond, the summer and escalating concessions are demanded by an increasing number of borrowers. A quick return to normality will therefore be welcomed by investors, developers and lenders, but until then, all loan parties will benefit from open and pre-emptive dialogue to navigate what are difficult times for most.”
Read the full article here.