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How to Strike a Deal In a Stagnant Net Lease Market
Transactions have slowed in just about every category for commercial real estate and net lease is no exception. The reasons are myriad for that but let's boil them down to two in particular: 1) sellers do not want to sell their property for less money than it was worth previously; and 2) sellers are taking on more risk and getting the same return.
Sellers, quite understandably, do not like the idea of selling something for less money than it was previously worth. Unfortunately, with many net lease assets having minimal or no rental increases in the base term, a diminishing lease term, and difficulty backfilling the locations at similar rent, values for these asset classes might never return to what they were just a year ago in our professional lifetime. This psychological issue prevents transactions from occurring. Most net lease owners didn't realize or wouldn't acknowledge the bond bubble that propelled property values had ended at some point, and many owners still don't understand what that means.
The second issue is a real problem. Today's sellers with existing financing have to take on more risk to get the same return they are currently getting. With interest rates and thus, the debt constant, higher today than yesterday, replacing cash flow means buying at a higher cap than the one they're selling. Since a cap rate is a measurement of risk compared to alternative investments, they're taking on more risk to get the same return. Furthermore, their current loan is an asset, and once they sell their property, that asset disappears. For many owners that might normally transact, it simply doesn't pencil, and they stop transacting.
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Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
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The Stranger to the Deed Rule
In 1987, a unanimous Court of Appeals reaffirmed the vitality of the "stranger to the deed" rule, which holds that if a grantor executes a deed to a grantee purporting to create an easement in a third party, the easement is invalid. Daniello v. Wagner, decided by the Second Department on November 29th, makes it clear that not all grantors (or their lawyers) have received the Court of Appeals' message, suggesting that the rule needs re-examination.