What is a single purpose entity in real estate?

What is a Single Purpose Entity?

A Single Purpose Entity (SPE) in real estate is a corporation, limited liability company, or other type of entity created solely to own, manage, and finance a specific real estate project. The primary purpose of an SPE is to isolate financial and legal risk by ensuring that the entity only holds the assets related to a single project, protecting them from being affected by issues or liabilities of the parent company or related entities. This structure is particularly common in commercial real estate developments and investments, as it offers a way to secure financing while limiting liability and protecting assets.

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