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The cost of the defeasance is comprised of the purchase of the securities as
substitute collateral and transaction costs. The securities purchase
fluctuates with the market and is a function of the spread between the rate on the conduit loan being
defeased and current treasury yields.
The transaction costs are typically fixed and are a function of the size
and structure of the loan and the existing loan servicer. Certain provisions of the loan documents
may also impact the transaction cost. The third party fees are compensation to the various parties
involved to effect a defeasance and are not a function of the defeasance consultant.
Average transaction fees are typically around $50,000 - $65,000, but
generally range as follows:
| Servicer Processing |
$7,500 - $25,000 |
| Servicer Counsel |
$10,000 - $25,000 |
| Rating Agency |
$0 - $15,000 |
| Special Servicer |
$0 - $2,500 |
| Special NY Counsel |
$0 - $10,000 |
| Successor Borrower Legal * |
$5,500 - $10,000 |
| Accountant |
$3,500 - $10,000 |
| Securities Intermediary/Custodian |
$4,000 - $8,000 |
| TriMont Defeasance Consulting Services * |
$7,500 - $17,500 |
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| Copyright 2006 Trimont Real Estate Advisors |
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