Let me first say that the head of the Transactions Group at Key Bank, Peggy S., is a gem. Since getting involved with our file she has been extremely responsive and is a very reasonable person. I sincerely enjoy working with her.
She clarified with me today that they don't have an issue with our Buyer assuming the loan. They are happy to recommend him. They only have an issue with him self-managing the property.
So, here's the learning point. When dealing with a Conduit Loan/CMBS loan, the Special Servicer is looking for an experienced third party management company or a self-managing buyer who has experience operating the same type of property, preferably in the same market area. It doesn't really matter if they have other relevant experience if it doesn't fit into their narrowly defined box.
They are willing to reconsider their position in 18-24 months after the buyer has some experience with the property. She commented that if the DSCR stays strong and the property continues to perform well, a request to self-manage at that time would likely be approved.
As you can tell, my tone is a lot less frustrated today. I have renewed hope that we will get this deal done.