NEED HELP: Single-Asset Entity Clause of Agency Loan Docs

[Keith Meyer]

I'm looking for some creative advice on how to remedy the following situation in regard to our agency loan on a commercial property:

The property contains a mixed-use zoned parcel which we were planning to exclude from the loan and the collateral pool. However, agencies require that the Borrowing Entity be a single-asset entity, meaning we can't hold this separate parcel within the same entity. Unfortunately the entity is an S Corp, so this limits our flexibility to do an internal transfer of the property and have it not be deemed a taxable sale.

We've explored the following but time is of the essence. If anyone has run into this situation and has a path-of-least-resistance solution, I'd be very grateful.

• - Create a subsidiary within the S Corp and transfer to the sub. Doesn't appear the agencies will allow this
• - Convert the S Corp to an LLC. This results in a taxable liquidation and event and also would likely take too long
• - Sell the parcel at arm's length to a third-party buyer. This again would take too long, especially with how slow title companies/appraisers/surveyors are moving these days, etc.