CMBS loans are notoriously rigid. At the first sight of an issue, they can slip into special servicing and borrowers generally have limited options when an asset is experiencing a problem. However, the pandemic is a little different. Borrowers have been able to negotiate payment deferrals, deferral of obligations to replenish certain reserves and the transfer of reserve funds to needed reserves, according to Susan Graham, a partner at Allen Matkins, who has represented clients that have been able to secure these terms.

"Servicers were initially overwhelmed with requests for forbearance and modifications," Graham tells GlobeSt.com. "At first, the servicers were slow to respond in any meaningful way. Many of those borrowers withdrew their requests, but many still needed and requested relief. Since the number of requests was still so high, if the servicers didn't cooperate and try to find some solution to the problems, the servicers would have been faced with an equally overwhelming number of loan defaults."

While negotiating these terms can be challenging, Graham says that borrowers can follow a few guidelines to help them secure some relief. First, be transparent and honest with the servicer, she says. This includes disclosing all of the issues with the property and a reason why the borrower should continue to operate the asset. Next, she recommends that borrowers make reasonable requests that the servicer can justify to the bondholders to move forward; be responsive to servicer requests; be patient because the process will take time; and continue managing the property in accordance with the loan documents. These tips will encourage the lender to work with a distressed borrower, and it's happening frequently through the pandemic.