Waterstone Defeasance recently closed a defeasance transaction for a $15.8 million CMBS loan.  The loan was secured by a portfolio consisting of industrial and warehouse properties in San Antonio, TX.  Waterstone guided the owners through the defeasance process coinciding with the owners’ sale of one of the properties and the refinancing of the loan for the properties.

As the defeasance consultant, Waterstone managed the activities of the numerous parties involved with the transaction in order to meet the borrower’s closing schedule. Parties associated with a defeasance transaction typically include the servicer, servicer’s counsel, borrower, borrower’s counsel, securities broker, custodian, accountant, rating agencies, and the successor borrower.

“I think what makes this interesting is that the economics of the transaction inevitability drive the defeasance analysis.  In this case, because the underlying assets were going to be used as a development site, it drove the cost / benefit discussion and ultimately the decision,” said George Rodriguez, Managing Partner & Cofounder at Waterstone.