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Loan Extension Requests Becoming Sign of Times

DALLAS-Lenders see an uptick in extension requests, with borrowers often looking for one more year to wait out the economy. But, it's not always easy to pass the test to buy time.

By Connie Gore | Updated on July 09, 2008

DALLAS-With the capital markets still in daily flux, many lenders are seeing an uptick in requests for loan extensions. Buying time, though, can be far from an easy feat despite provisions in original loan documents.

Michael Bryant, senior vice president in Dallas for Capmark Finance Inc., and Lance Wright, regional director for Norwalk, CT-based GE Real Estate, say extension requests have been steadily climbing for six months and are certain to continue upward as CMBS loans of recent years come due. The most common request is a one-year breather.

“As each lender reviews the extension request, they’re going to look first and foremost at the sponsorship,” Bryant says, “and next, the business plan.” The common-sense approach still can result in rejection due to today’s market conditions, he explains.

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