Real Estate Debt Advisory Services

With valuations uncertain, lenders have tightened their underwriting and lowered loan proceeds. Owner/operators with near- to mid-term maturities likely expected to cash out when refinancing the loan. But the combination of higher cost of capital and lower proceeds instead raises the probability of a required cash infusion to either extend or refinance loans, irrespective of property type. Lenders may already be knocking at the door asking for a partial paydown to cover debt service coverage ratio and debt yield covenant breaches. For loans with floating rates, or loans collateralized by properties with poor operating performance, the unthinkable possibility of a default before or at maturity is now possible.

EisnerAmper’s Real Estate Services Group supports real estate companies and their investors in developing business and financial strategies in up- and down-market cycles. We have deep expertise across property types and markets, and our clients range from family offices and family-owned property companies to REITs and private equity funds. This experience enables us to recognize risks and opportunities emerging from market changes, and their impact on the economics of specific investments, and the related accounting and tax implications.

Our team of advisors understands the critical steps required to successfully work with lenders in loan structuring and negotiation, to prevent defaults and preserve our clients’ equity in their multifamily and commercial property investments. We approach debt advisory holistically to optimize outcomes, bringing together experts who understand investment strategy, property management, real estate finance and the accounting and tax implications of alternative debt solutions. Through detailed analysis of rental revenue and operating expenses, we work to model supportable cash flow and develop alternative tax efficient debt strategies. We work alongside our clients from planning to closing, with the goal of realizing sustainable results.

To ensure our clients have the best support, we have assembled an integrated team of specialists in the following areas:

• Real estate business planning, operations, leasing, cost reduction and internal controls
• Cash flow modeling
• Real estate tax planning
• Restructuring and bankruptcy
• Fraud and forensics

Our services include:

Lender Discussion Preparation

Rent roll and lease analysis Tenant financial analysis Operating efficiency review Hospitality operational assessment Property/entity cash flow modeling Sources and uses of cash monitoring Debt covenant compliance monitoring Strategic business planning Assessment of long-term recapitalization requirements

Loan Restructuring Strategy

Creating alternative refinance and restructure strategies covenant waivers alternative use of reserves use of cash sweeps payment modifications maturity extensions partial and discounted payoffs loan restructuring including splitting/partial debt subordination Tax planning for proposed debt strategies, considering: potential discharge of indebtedness income foreclosure or deed in lieu transactions Preparing lender presentations Evaluating lender term sheets Providing support in lender negotiations Bankruptcy preparation and compliance

Additional Supporting Services

• Management leadership and executive coaching
• Internal control enhancements
• Fraud mitigation and prevention services
• Overall project planning and management