Assuming the CMBS loan of a Hotel in North Carolina
Holiday Inn Express
SP generally requires a single purpose entity established in Delaware as the borrower on the note. Additionally, SP requires a Delaware attorney’s opinion on the operating agreement which adds to the time and effort in these assumption projects. If this is a 1031 project, then this LLC will be a disregarded LLC owned 100% by the LLC that is in 1031 exchange adding further complexity to the ownership structure. Many companies out there advertise handling the assumption but they focus on submission of the buyer’s package and some basic interaction/negotiation with the SP which covers about 10% of the whole process. We at Scientific Capital handle the initial submission, any negotiations, and every step of the way to the closing, essentially the 100% of the process. Although the CMBS loan assumption transactions are stressful, our project management and heavy communication with the stakeholders make it far less unpleasant of an experience for our clients. This project included a 7.5 million CMBS existing loan assumption and negotiations on the amount and the allocation of the PIP and other reserves.