Single Purpose Entity

Special Purpose Entities in Commercial Real Estate

Special Purpose Entities in Commercial Real Estate

A special purpose entity or single purpose entity (SPE), also known as a special purpose vehicle (SPV), is a legal entity used to acquire and finance a specific investment while limiting risk for all parties involved. The main benefit of an SPE is that it is bankruptcy remote-- if the firm that owns the entity declares bankruptcy, there is only a limited risk that the SPE will become ensnared in the bankruptcy proceedings.