Press Releases


LMA publishes "The Real Estate Loan Book"

14 May 2015

With European real estate firmly in the spotlight for global investors, the LMA has published its fourth book, which seeks to cover the many issues to be considered, from tax to security to sustainability, by participants active in the commercial real estate loan market.

After a series of country and regional real estate loan market commentaries, which centre on key real estate markets, the book goes on to examine the different types of commercial real estate (CRE) financing options, such as the loan product and CMBS, and the different parties and advisors to CRE finance transactions, including banks, insurers, funds, borrowers, valuers and tax advisors. It also outlines the regulatory initiatives that parties to a CRE financing transaction need to be aware of and provides an examination of documentation and governance issues to be considered when participating in CRE loan transactions.

"The Real Estate Loan Book" will be launched at the LMA's real estate finance conference today and copies will be available to members at the event.

The book will be sent free to all LMA members and will also be distributed to universities and business schools. It can be purchased by non-LMA members for £50.

Quote from the back-cover of the book:
Real Estate underpins and stimulates economic growth, but it also undermines and stalls it at times of credit exuberance.

Probably more than any other lending class it is central to our lives, as a location to live, work, and so much more. Whether as lenders, advisors, investors or occupiers, we all have an interest in understanding this market. The Real Estate Loan Book aims to satisfy that objective, with an easily readable coverage of many of the issues to be considered, from tax, to security, to sustainability.

The Financial Crisis of 2008/2009 has brought many changes, from increased regulation, to new lenders, to revised loan structures. This book looks to explain the impact of these changes. It also outlines the workings and rationale of the LMA's two recent Real Estate facility agreements and intercreditor.

In spite of the Real Estate market being cyclical and lessons not always being learnt or remembered, this asset class is pivotal. Notwithstanding efforts to reclaim seas and deserts, as the global population rises, we are driven by a need to acquire and exploit ever more usable space in critical locations. In the words of Mark Twain: "Buy land, they're not making it anymore."

Clare Dawson, Chief Executive - LMA
"We are delighted to have added another book to the expanding LMA library. We hope that it will provide a valuable reference guide for all those active in the real estate finance market, particularly those who are new to the industry who wish to gain a greater understanding of how the market works."

"This book is very much a product of the LMA's current agenda – to expand the Association's remit beyond the purely corporate loan market into a broader spectrum of syndicated loan products. This book sits alongside a growing library of facility agreements intended for use in real estate finance transactions."


1. Why has the LMA produced the book?
As already set out in the above press release, the book is not only reflective of the increased interest on the part of investors in real estate investment opportunities, but also aims to address the lack of detailed published educational material in relation to both real estate finance and the loan product generally. The book is also a product of the LMA's current remit to expand into different areas of the loan market, going beyond its traditional areas of focus. Finally, the book is illustrative of one of the LMA's core objectives: to improve liquidity. It is hoped that this book will assist in this process by enabling investors to understand the product and the specific risks which may arise when lending against real estate assets.

The book sits alongside the LMA's other real estate finance projects – the production of standardised documentation specifically intended for use in real estate finance transactions and a series of training events designed for participants active in the real estate finance market.

2. Who has contributed to the book?
Each chapter has been written by senior loan market professionals (including lenders, lawyers, borrowers, and other key advisors and service providers). These individuals are experts in their chosen fields and work actively in the CRE finance market.

3. What geographical regions does the book cover?
The book focuses on the real estate finance market in the key Western European jurisdictions of the UK, France and Germany. The book also contains a chapter with a general analysis of real estate finance in CEE, CIS and Russia.

4. What are the principal themes discussed in the book?
In addition to loan market commentaries centred on various European jurisdictions and separate analyses of different types of loan investment (direct lending, CMBS and the acquisition of non-performing loan portfolios) the book also contains a section dedicated to the key parties and advisors to real estate finance transactions, including banks, insurers, debt funds, borrowers, valuers, insurance brokers and tax advisors. Each chapter therein contains a general introduction to how each party contributes to the market (with a view to providing non-specialists with a basic understanding of what they do); how the role they play has evolved; how the global financial crisis has impacted them; how they are likely to evolve both short and long term; and any other relevant issues and challenges. In addition, the book considers other matters specific to real estate finance transactions such as interest rate hedging and the property due diligence process conducted by lenders.

5. What are the legal and regulatory issues particular to real estate finance?
The book contains several chapters focused on documentation, law and regulation. For example, it includes an overview of the LMA's facility agreements for use in real estate finance transactions; a chapter on the LMA REF intercreditor agreement; a chapter which looks specifically at taking security and another which considers security enforcement and dispute resolution. The book also contains chapters on financial regulation relevant to real estate and what lenders and investors need to be aware of in the context of sustainability.