Lending Landscape: 2025 Finance Practice Update

The finance industry has faced significant volatility in recent years. Bank failures, high interest rates, tariffs, and shifting federal policies are contributing to market uncertainty. This unpredictability often prompts developers, investors, and lenders to become more risk-averse. Deals that do move forward are typically burdened by stringent terms and prolonged closing timelines.

Shifts in Construction Financing

Before COVID-19, institutional lenders readily offered construction financing, giving developers the ability to shop around and leverage negotiating power. Today, institutional lenders are increasingly hesitant to extend construction loans. Instead, private lenders are stepping in to fill the gap, but the terms they offer are often onerous.



Developers now face restrictive lending conditions such as cash management provisions, broad guarantees, and complex mezzanine loan structures.

• Cash Management Provisions: All income from the property is held by the lender until certain financial covenants are satisfied. Once met, funds are applied to debt service, expenses, and then released to the borrower.

• Guarantees: Guarantees may be labeled as completion guarantees or carry guarantees, but they often overreach what would be typical. For instance, a completion guaranty may allow a lender to demand liquidated damages without obtaining a court judgment, rather than simply requiring the guarantor to complete the project.

• Mezzanine Loans: These subordinate financing tools are increasingly being utilized by developers seeking flexibility and creative capital solutions. However, they often come with higher interest rates and additional risk. As mezzanine loans become a more prevalent tool in the market, understanding their structure and implications is crucial for developers and investors looking to remain competitive in a shifting landscape.

Recent Transaction Highlights

Despite current challenges, our Finance Practice Group continues to navigate complex financing structures and successfully close significant transactions, including senior mortgage loans, construction loans, and mezzanine loans.

Examples of transactions closed in the last 12 months representing either lenders or borrowers:

• $77,750,000 Senior Mortgage Loan and $5,250,000 Mezzanine Loan for a residential development in Rockland County.



• $53,000,000 Senior Construction Loan and $20,000,000 Mezzanine Loan for a mixed-use residential development in Pelham.

• $20,800,000 Mortgage Loan for a shopping center in Derby, Connecticut.

• $30,000,000 Mortgage Modification for property in Brooklyn, New York.

• $20,000,000 Mortgage Loan to finance the rehabilitation of a high-profile entertainment company's facility in Connecticut.

With deep roots and a strong regional presence, Cuddy & Feder LLP’s finance attorneys provide sophisticated legal representation across a wide range of financial transactions. Our team successfully represents lenders, borrowers, and developers in complex financing structures, including real estate financing, commercial lending transactions, and public finance. We leverage our experience and community ties to provide tailored solutions that drive client success. READ MORE >

Highlighted Attorneys

Eon S. Nichols

Partner

Eon is a Partner at the firm, serving as an esteemed member of the Management Committee. With an exceptional focus on leveraging opportunities and achieving outstanding outcomes, Eon’s practice encompasses the full spectrum of real estate transactions, seamlessly bridging both commercial and residential sectors. Additionally, Eon’s expertise extends to real estate financing, where he navigates complex commercial lending transactions and leasing agreements.

Thomai "Amy" Natsoulis

Partner

Amy is a partner who joined the firm in 2010. Her practice involves commercial and residential real estate transactions, commercial lending transactions, leasing transactions, including solar and telecom leases, and various corporate matters involving formation, operating, employment and termination agreements.

About Cuddy & Feder LLP

Cuddy & Feder LLP proudly serves clients across a diverse range of practice areas, including real estate; public and private finance; litigation & appellate practice; land use, zoning & development; telecommunications; energy & environmental; cannabis law; non-profit organizations; and trusts, estates & elder law. For over 50 years, we have established ourselves as a leading law firm serving Westchester, New York City, Connecticut, and the Hudson River Valley.

Commitment to Community Service

We are deeply committed to giving back to the communities where we live and work. Our attorneys and staff actively support local organizations, nonprofits, and charitable initiatives through pro bono legal services, board memberships, and community partnerships. This dedication to service reflects our core values of integrity, leadership, and compassion, and continues to drive our work within the communities we proudly serve.