Earlier this year, following demand by participants in the real estate finance market, the Loan Markets Association (LMA) launched its long awaited real estate finance facility agreement (the REF Agreement). Previously, the LMA’s investment grade and leveraged facility documents had been used as a base document, with participants adding any necessary real estate specific provisions. As a result of this, however, documents were being issued by providers with differing boilerplate real estate provisions, and negotiation times were consequently becoming extended.

The REF Agreement is therefore a welcome step forward and is intended by the LMA to promote the efficiency of the market and provide a common framework and language for those involved in real estate finance transactions. The expectation is that advisers will be able to spend more time negotiating the specific provisions of the deal rather than discussing boilerplate.

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