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Well, you have to, again, because of the process I just described, particularly in New York where most things are auctioned, by the time the mezzanine lender shows up, there’s usually a very short period of time to close. They’re usually adapting their documents to the documents that the mortgage lender is using, so they’re somewhat constrained as to what the documents are. They have very little time for due diligence, and they have to be prepared to own the property ultimately, so if they’re smart, they’ll try to figure out how to do the same level of diligence that the owner would undertake for itself because they may end up owning the property one day if the owner fails.
New York real estate attorney Robert Ivanhoe of Greenberg Traurig discusses the challenges of representing mezzanine lenders.