LOS ANGELES-The process of defeasance, which deals with prepayment penalties on bank loans, had waned considerably during the recent economic downturn. In 2007, the number of defeasances in the US hit its peak at 3,000 only to crash to 100 in 2008. The number has been increasing by about 100 defeasances per year since then, with a total of 400 in 2011 and an expectation of as many as 800 this year, according to Yehuda Neuberger, CEO of AST Defeasance, a locally based defeasance consulting firm.

“There has been an easing in the defeasance market, not because treasury rates have gotten better, but lending has opened up, refi has become a little more viable and sale prices a little better for sellers, Neuberger tells GlobeSt.com. “Defeasance is slowly picking back up. This has got to mean that properties are performing a little better.”

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