Dan Stanco Discusses Back Leverage Financing for Real Estate Transactions in Real Estate Capital Europe

Back leverage has historically been a common financing feature in U.S. commercial real estate transactions, but in recent years it has become a more prevalent solution in the European landscape. In an article from Real Estate Capital Europe, real estate partner Dan Stanco talked about how European back leverage providers are employing market-to-market provisions as protection measures in an evolving market.

He notes that back leverage borrowers are better protected than they once were. “Twenty years ago, a bank could ask a credit fund to pay down money that same day if they perceived a meaningful credit event. It was very discretionary. Today, there are more objective measurements, so there needs to be a reasonable basis for revaluing the loan of the real estate.”