Commercial mortgaged-backed securities lenders are reviewing mortgages on properties with “tenants in common” ownership structures, creating a credit-quality concern for bond buyers.
“If you properly structure these loans, you can make them close to credit-neutral,” said Gerard Keegan, partner and co-chair of Alston & Bird’s Real Estate Finance & Investment Group.
He warned that there’s still inherent risk in dealing with
multiple direct owners of property because there is nothing to stop those
owners — who are often unsophisticated mom-and-pop investors — from seeking to
block workouts or file for bankruptcy regardless of protections.