CoStar Column: The importance of the facility agent and security agent

In the wake of the 2008 global financial crisis, tightened regulations and increased pressure on operating costs presented a new challenge to an already ever-changing CRE loan market, pushing many lenders to seek agency services from specialist third-party institutions. These institutions, known as Facility Agents and Security Agents, have established themselves as a vital intermediary in the CRE loan space, particularly on larger transactions, which are typically funded by lender clubs or syndicates. In addition, with the emergence and increase in non-bank lending (debt funds etc.) in the CRE loan space, third party Facility Agents and Security Agents have played an important role in assisting such lenders where they would not necessarily have had the capacity to administer and manage their loans.