In two recently published articles, Cadwalader attorneys described trends in the tax structure of commercial real estate collateralized loan obligations ("CRE-CLOs").
The first article, published by Law360, discusses recent trends in structuring CRE-CLOs. As described by the attorneys, CRE-CLOs can be a more flexible financing option than real estate mortgage investment conduits ("REMICs"). The attorneys explained that to avoid U.S. entity-level tax, CRE-CLOs are generally structured as either a (i) qualified real estate investment trust (or REIT) subsidiary ("QRS") or (ii) foreign corporation that is not a QRS. The attorneys also summarized each structure, noting that they can be "powerful tools for securitizing pools of assets that are inappropriate for acquisition by a REMIC." The article was authored by Jason Schwartz, Gary Silverstein and Jeffrey Rotblat.
The second article, published by Bloomberg BNA, provides a more detailed look at the tax considerations associated with both CRE-CLO structures. The article was authored by Jason Schwartz, Gary Silverstein and Daniel Ng.
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