LMA real estate finance multi-property investment facility agreement—commentary
LMA real estate finance multi-property investment facility agreement—commentary

The following Banking & Finance guidance note provides comprehensive and up to date legal information covering:

  • LMA real estate finance multi-property investment facility agreement—commentary
  • Transaction structure assumed by the LMA REF Investment Facility Agreement
  • Structure of the LMA REF Investment Facility Agreement
  • The facility
  • Purpose of the facility
  • Utilisation mechanics and conditions precedent
  • Repayment
  • Mandatory prepayment
  • Interest and hedging
  • Valuations
  • more

Real estate finance (REF) transactions are either investment finance transactions or development finance transactions, depending on whether the property is being purchased as an investment (ie it is already generating revenue) or whether the property is being purchased to be developed. Investment finance transactions are more commonly encountered than development finance transactions. For a general introduction to real estate finance investment facilities, see Practice Notes:

  1. Introduction to real estate finance—the lending structure, and

  2. Real estate finance—investment facilities—key features

The Loan Market Association (LMA) has produced a 'standard form' document for use in real estate finance investment transactions together with a helpful user guide, both of which are available to members of the LMA—see the Single Currency Term Facility Agreement for Real Estate Finance Multi-property Investment Transactions (LMA REF Investment Facility Agreement) and user guide on the LMA website. Real estate finance transactions can vary considerably and the LMA recognises in its user guide that it is difficult to produce a true 'standard form' document for real estate finance investment transactions. The user guide highlights the fact that the document should only be used as a starting point for a transaction and that it will need to be tailored to the particular transaction structure and commercial agreements between the parties.

This Practice Note examines the key provisions of the LMA REF