Real Estate Loans > Commercial Financing and Single Asset Entities
Commercial Financing and Single Asset Entities
Large Commercial Lenders Prefer Properties to be Owned by a Single
single asset entity (SAE) is usually a limited liability company
(LLC) that owns only one commercial or multi-family property. You
will often see Subchapter S corporations formed to own a single property,
especially in New York where a New York state court case from the
1970's imputed personal liability to the owner when a tenant was
injured. A regular C-corporation or a limited partnership will sometimes
be formed to hold title to commercial property, although the limited
liability company (LLC) is now far more common.
reason why major commercial mortgage lenders prefer SAE's is because
if the borrower files a personal bankrupty, perhaps as a result of
a traffic accident, the commercial mortgage lender is not "stayed" (ordered
to refrain) from commencing or completing its foreclosure.