Team takes the strain out of $16M defeasance transaction.

Commercial Defeasance LLC recently structured and closed a $16,000,000 defeasance transaction on behalf of Delaware-based University Realty Associates LLC, for the 258,000 s/ f University Plaza located in Newark, NJ.

The defeasance enabled University Realty Associates LLC to refinance and pull equity out of the property.

This retail center property is located at Route273and Chapman Rd, Newark.

Alan Jaffey, Managing Member of University Realty associates LLC, said "I had avoided going through with a defeasance transaction in the past because I thought it was too difficult and expensive. The Commercial Defeasance team made it an easy process and so I have completed three defeasance transactions with them. I trust that the job will be done exactly when I need it to be and I have been very pleased with every transaction completed."

In order to sell or refinance, a CMBS borrower must navigate the complex defeasance process, nearly all fixed-rate conduit loans originated since 1998 prohibit a simple cash prepayment. Defeasance is a substitution of collateral in which a portfolio of government securities replaces the property as the collateral. Redemption of principal and interest from the securities pays all remaining debt service, so the note technically is still in place but is repaid from the securities purchased.