Client Alert: Real Estate SPEs May Benefit From PPP

Single purpose entity real estate owners (SPE Owners) may be able to benefit indirectly from Paycheck Protection Program loans (PPP Loans) obtained by property management companies (Property Managers) to cover their payroll costs. Property management agreements typically require SPE Owners to reimburse Property Manager payroll costs. If property management agreements are amended to provide that SPE Owners are not required to reimburse payroll costs covered by forgivable PPP Loans, the benefit of PPP Loan payroll support should pass through indirectly to the SPE Owners who actually bear the payroll cost.