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Commercial Leasing Law & Strategy
Legal Office of the Future — Reimagined
Bella Schiro and Misun Yoon
Many in the legal economy may be asking themselves whether they need office space at all now that everyone has been forcibly migrated to cyberspace. But having experienced work from home for several months, there is a newfound appreciation for the office workplace. But what will the office look like when we return to it?
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Commercial Leasing Law & Strategy
Cash Flows for Commercial Leases During COVID-19
Jonathan Koevary and Robert Gagne
To say the least, for those companies that filed for bankruptcy on the eve of the COVID-19 shutdowns, the strategies — and available cash flows to pay landlords — did not go as planned.
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Commercial Leasing Law & Strategy
Mezzanine Lenders and Foreclosure Sales During COVID-19
Jeffrey B. Steiner and Scott A. Weinberg
This article reviews a recent case, D2 Mark LLC v. OREI VI Investments LLC, to understand how the court’s decision may provide mezzanine lenders with guidance in structuring a UCC foreclosure sale auction in the COVID-19 landscape so as to strengthen their position against any claims by the mezzanine borrower that the sale is not commercially reasonable.
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Commercial Leasing Law & Strategy
Will Pandemic Lead to More SARE Filings?
Lidia Dinkova
Single-asset real estate bankruptcies (SAREs) are streamlined reorganizations for debt taken out by borrowers on just one property, giving them a three-month window to propose a restructuring plan.
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Commercial Leasing Law & Strategy
Does Force Majeure Apply? Answering Questions About Contracts in the Time of Coronavirus
New ebook from ALM's Law Journal Press addresses clients' questions about the enforceability of contracts in the wake of COVID-19.
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Commercial Leasing Law & Strategy
New York Court Allows J.Crew to Shutter Under Terms of Mall Lease Despite Continuous Operations Provision
Danielle C. Lesser
Malls across America, long suffering even before the rise of COVID-19, are now forced to confront a wave of store closures. Troubled retailers will, without doubt, seek to close their failing mall locations. To stem these efforts, landlords have applied to courts for injunctive relief to force stores to remain open and operating, despite lagging sales, through the enforcement of the “continuous operations provision” found in mall leases.
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Commercial Leasing Law & Strategy
New Strategies for Renegotiating Office Leases Post-COVID
David Leffler and David Jacoby
Current circumstances present an opportunity for tenants to use new strategies to renegotiate or even terminate leases. This article looks at conventional legal strategies that may provide grounds for lease termination before turning to consider another, third, approach.
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Commercial Leasing Law & Strategy
Real Estate Loan Workout: Exchange of Enhancements for Concessions
Richard S. Fries
As a result of the coronavirus pandemic, a property owner might reach out to its lender for urgent, needed debt relief. The lender, which strives for a performing asset, an on-going relationship with its customer makes concessions. In exchange for these concessions, the lender should obtain credit and legal enhancements., which should also enable the lender to make concessions that are more meaningful to the property owner, its investors, its tenants and its business.
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Commercial Leasing Law & Strategy
Law Firm Leasing Drops During COVID-19
Christine Simmons
Overall, the pandemic will likely result in long-term changes for law firm offices. While law firm leasing activity will eventually pick up, firms may decrease their overall footprints, taking up 10% to 15% less square footage because some people will continue working from home.
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Commercial Leasing Law & Strategy
Creative Strategies for Landlords and Tenants to Survive the COVID-19 Shutdown
Dana Delman and John Vukmanovic
When COVID-19-related restrictions imposed by state and local governments are lifted, there is no guarantee that they will have done more than delay the inevitable: eviction and bankruptcy. Modifications should be used to cut risk and losses. If at all possible, landlords and tenants should cooperate now to avoid that outcome.
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Commercial Leasing Law & Strategy
Non-Monetary Defaults in Commercial Leases: A Difficult Eviction
Ashlyn Robinson Banks
“I want them out!” When a tenant stops paying rent, landlords usually have this reaction. But what about those tenants faithfully paying rent while breaching other provisions of the lease? This article examines the eviction of a commercial tenant for non-monetary defaults.
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Commercial Leasing Law & Strategy
“VARA-90”: What Landlords Can Do to Stop the Aerosol Spread … of Graffiti Artists’ Claims
Joseph I. Farca
How did the artists qualify for protection under the Visual Artists Rights Act, how could the owners know whether the artists had achieved “recognized stature” warranting prevention of their works’ destruction, and what could the owners have done to avoid liability while retaining the right to dispose of their properties as they saw fit?
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Commercial Leasing Law & Strategy
Effects of COVID-19 Shutdown on Commercial Real Estate
Katheryn Tucker
Much attention has been paid to the devastating effects of the COVID-19 pandemic on income, unemployment and cash flow for businesses. But new research takes an eye opening look at what the shutdown of many businesses may do to the worth of commercial real estate.
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Commercial Leasing Law & Strategy
Commercial Lease Requirements During the Pandemic
Terrence Dunn
Can a commercial tenant that is required to be closed during the COVID-19 pandemic be relieved of, or does it have a defense to, the obligation to continue to pay rent? The short answer is possibly yes, but the situation is unprecedented and the answer may have to be determined in litigation.
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Commercial Leasing Law & Strategy
COVID-19: Should Landlords Apply Security Deposits to Unpaid Rents?
Ira Fierstein
There are currently several bills in various stages of being passed into law in several states as of early April, which would restrict, on a temporary basis, the eviction of commercial tenants from their leased premises for failure to pay rent, Whether these bills get signed into law and survive judicial scrutiny remains to be seen. The question then is whether a landlord may enforce the security deposit section of its lease and take the deposit should the tenant miss a rent payment.
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Commercial Leasing Law & Strategy
5 Lease and Finance Options To Help Conserve — or Even Create — Capital
Barry Steel
Five options available that leasing and financing can help law firms not only to deploy their business continuity requirements in the short term, but also improving liquidity now and better position the firm for their future.
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Commercial Leasing Law & Strategy
Personal Guaranty of Commercial Lease Held Discharged in Guarantor’s Bankruptcy
Andrew C. Kassner and Joseph N. Argentina Jr.
As we prepare for the anticipated increase in bankruptcy filings caused by the COVID-19 pandemic's impact on the economy, many practitioners are trying to compare this to the savings and loan crisis of the late 1980s. One of the issues that keeps coming up cycle after cycle is whether a personal guaranty of a commercial lease is discharged in the bankruptcy of the individual guarantor. Court decisions have split on this issue for years.
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Commercial Leasing Law & Strategy
What a Difference 3 Months Can Make
Lisa Brown
The coronavirus has brokers guessing as to how this will affect leasing in the short term, and a report says leasing activity is likely to have a degree of decline in transaction volumes compared to pre-crisis expectations
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Commercial Leasing Law & Strategy
Coronavirus ‘Brutal’ for Real Estate Transactions as Lenders Hit Brakes on Financing
Lidia Dinkova
Much like other everyday activities, real estate transactions are coming to a halt because lenders are holding back over the coronavirus pandemic.
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Commercial Leasing Law & Strategy
The Coronavirus Is Delaying a Construction Project. What Does Your Contract Say?
Erika Morphy
Construction project delays that could put developers in default of their contracts. Now is the time to re-examine those contracts to see what exactly they have agreed to.
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Commercial Leasing Law & Strategy
Construction Management Agreements: Pricing
Kenneth M. Block and Joshua M. Levy
This article covers the pricing of construction management agreements (CMAs), including the fee of the construction manager, general conditions costs, subcontract costs, contingency and insurance. Note: Where appropriate, we will make distinctions between “cost-plus” and guaranteed maximum price (GMP) CMAs.
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Commercial Leasing Law & Strategy
Case Notes
Stewart E. Sterk
Tenant Entitled to Relief from Failure to Timely Exercise Renewal Option
Neighbor Has Standing to Seek Damages for Violation of Zoning Ordinance
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Commercial Leasing Law & Strategy
Force Majeure and the Doctrine of Impossibility
John G. Kelly
The COVID-19 pandemic is resulting in landlords and tenants closely reviewing a clause in their lease that was long considered unimportant boilerplate. Yes, we are referring to the “force majeure” provision.
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Commercial Leasing Law & Strategy
Assignment and Consent Standards in Commercial Leases
John G. Kelly
Assignment provisions in commercial leases are heavily negotiated and very important to both landlords and tenants. This article presents a brief overview of the assignment provision in commercial leases, both office and retail.
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Commercial Leasing Law & Strategy
Neighbor Standing to Challenge SEQRA Determinations
Stewart E. Sterk
When does an immediately adjacent neighbor have standing to challenge a SEQRA determination?
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Commercial Leasing Law & Strategy
SEC Proposes Changes to Accredited Investor Definition
Peter Fass
Real estate syndication offerings often rely on Rule 506 of Regulation D to exempt such offerings from registration under the Securities Act. Rule 506 requires that, with certain limited exceptions, purchasers of the securities offered are limited to accredited investors. Amendments proposed by the SEC in December modify certain of the existing categories of accredited investors and create certain new categories.
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Commercial Leasing Law & Strategy
In the Wake of Shields: Broader Implications for Decision on Commercial Landlord Liability
David Incle Jr. and Christian R. Baillie
The Supreme Court of New Jersey recently revisited an oft-contested issue in the area of premises liability: whether a commercial landlord owes a duty to its tenant’s business invitees to maintain the premises, under a triple net lease, where the tenant is in exclusive possession of the demised premises.
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The Bankruptcy Strategist
Tips to Minimize Landlord’s Exposure When a Commercial Tenant Files Bankruptcy
Carmen Contreras-Martinez
Landlords often have clues that a tenant is going to be filing for bankruptcy, rental payments are consistently late several months in a row and the tenant falls more than a month behind on the rent. But, it can still be shocking when a landlord receives a legal notice in the mail, instead of a rent check.
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Commercial Leasing Law & Strategy
Reset Clauses In Ground Leases
Peter E. Fisch and Mitchell L. Berg
The purpose behind rent reset clauses is simple — to capture any change in the fair market value (and fair market rental value) of the leased property. However, the application of rent reset clauses in practice is anything but simple, and the consequences of such clauses can be significant.
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Commercial Leasing Law & Strategy
Flood and Terrorism Insurance Reauthorization: Safe for Now
Jeffrey B. Steiner and Scott A Weinberg
Federal programs have made insurance more readily accessible to protect real property in the event of a flood or an act of terrorism. These programs enable flood and terrorism insurance to be widely available at realistic price points by ensuring that the amount of the premiums payable for such insurance remain at a level that a borrower can afford, which in turn preserves the underwritten economics of the loan transaction.
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Commercial Leasing Law & Strategy
Local Law Banning Music Festival Is Not Unconstitutional Restraint of Speech
Steven M. Silverberg
A landowner challenged local zoning that banned holding a three-day music festival, arguing that the law was an unconstitutional violation of free speech and void for vagueness.
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Commercial Leasing Law & Strategy
Tips to Minimize Landlord’s Exposure When a Commercial Tenant Files Bankruptcy
Carmen Contreras-Martinez
Because bankruptcy can add significant expenses and increase the time it takes to remove a delinquent tenant, landlords should not allow tenants to fall far behind on rental payments. Here are some tips on how to address the issues raised by a bankrupt tenant.
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Commercial Leasing Law & Strategy
High-Street Retail in an Adjustment Phase
Kelsi Maree Borland
High-street retail is going through an adjustment period, but for properties that check the right boxes, there are still active buyers. In some cases, even bidding wars.
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Commercial Leasing Law & Strategy
Case Notes
Miami Agrees to Settle Costly Island Development Dispute After Losing Key Ruling
Breach of Lease By Subsidiary Does Not Justify Piercing Corporate Veil
Tenant Not Entitled to Preliminary Injunction Requiring Landlord to Co-Operate
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Commercial Leasing Law & Strategy
Recent Investigation, Prosecution and Legislation Regarding Fraudulent Deeds
Carol A. Sigmond
New York City is seeing an upsurge of deed theft. Attorneys, architects, title companies, real estate brokers, agents, contractors, developers and construction managers need to be alert to this potential issue when blocks of properties are assembled for development in these neighborhoods.
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Commercial Leasing Law & Strategy
Unfolding Trends That Will Dominate the Next Year
Erika Morphy
For all intents, 2019 has been good for commercial real estate. 2020, at least for the first half, promises much of the same. That is not to say that the CRE environment will be stagnant; as always there will be changes. Some of these will be subtle while others may well be more ground shaking — and likely due to outside circumstances.
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Commercial Leasing Law & Strategy
Adding Value, Reducing Risk: Peer Review for Construction Projects
Jacqueline Greenberg Vogt
In the aftermath of recent construction disasters leading to catastrophic failures and loss of life, the concept of peer review has taken on an entirely new significance. A comprehensive plan and specification peer review is an effective risk management strategy for ensuring quality construction.
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Commercial Leasing Law & Strategy
How Retailers Are Pushing the Boundaries
Kelsi Maree Borland
Entertainment and experience has become the cornerstone of retail survival in the wake of increasing online shopping. Now, top brands are starting to incorporate entertainment experiences into select markets to bush the boundaries of the traditional retail structure.
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Commercial Leasing Law & Strategy
Case Notes
Scott E. Mollen
Landlord’s Oral Request for Use and Occupancy in Commercial Non-Payment Proceeding Denied
Landlord Sought to Pierce the Corporate Veil to Recover Unpaid Rent
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Commercial Leasing Law & Strategy
What is the Difference Between Flexible Space Models and Traditional Office Leasing?
Elizabeth Kluger Cooper and Zach Boroson
Market forces — such as workplace design, demographics and urbanization, capital flow and technology — are driving the growth of flexible space.
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Commercial Leasing Law & Strategy
Assignments and Collateral Assignments of Commercial Leases
Terrence M. Dunn
What Tenants and Landlords Should Know
There are differences between assignments of leases and collateral assignments of leases, and each has aspects that parties to these agreements should expect and look out for. Let’s discuss some of these issues.
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Commercial Leasing Law & Strategy
Why Community Groups Can Never Win Against Developers
John R. Low-Beer
The ‘Dreikausesn’ Paradox, Other Hurdles, and Suggestions for Change
Under current New York law, even the most meritorious legal challenge to property development faces insurmountable barriers once construction starts, because absent the most egregious wrongdoing, the courts will not order demolition of completed buildings, and current law makes it virtually impossible to obtain a preliminary injunction to halt construction.
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Commercial Leasing Law & Strategy
Case Notes
Janice Inman
It’s Not the Money Spent, It’s the Level of Conformance
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Commercial Leasing Law & Strategy
Structuring Strategies for Off-Balance-Sheet Treatment of Real Property Leases
Jun Kwon
The Financial Accounting Standards Board released a new set of lease accounting standards, ASC 842, which went into effect earlier this year. Most significantly, publicly traded companies are now obligated to list all leases of 12 months or longer on their balance sheets as both assets and liabilities. Large private companies will follow suit in 2020.
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Commercial Leasing Law & Strategy
159 MP Corp.: Grateful That Majority Rejected Dissent’s Radical Approach
Howard A. Levine
Further comment and analysis is warranted on the three-judge dissent, which, if adopted by the majority, would have fundamentally altered the very foundation of New York contract law.
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Commercial Leasing Law & Strategy
Case Notes
Janice Inman
Defense Based on Federal Law Cannot Confer Federal Jurisdiction
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Commercial Leasing Law & Strategy
A Tenant’s Perspective on SNDAs: Non-Disturbance Is Not Enough
James O’Brien
Part Two of a Two-Part Article
Part One of this article outlined the basic elements of a subordination, non-disturbance and attornment agreement (SNDA), which regulates two competing interests in the same property — tenant’s right to possess its premises pursuant to its lease and mortgage lender’s security interest in that same premises. Part Two explains the differences between the concepts of “non-disturbance” and “recognition,” while contending that lease recognition is more important to the tenant than not having its possession disturbed.
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Commercial Leasing Law & Strategy
Case Notes
Court Decides Who Is the ‘Prevailing Party’
No Duty to Collect Rent from Subsequent Tenant
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Commercial Leasing Law & Strategy
A Tenant’s Perspective on SNDAs: Non-Disturbance Is Not Enough
James O’Brien
Part One of a Two-Part Article
This article outlines the basic elements of an SNDA and will explain the differences between the concepts of “non-disturbance” and “recognition,” while contending that lease recognition is more important to the tenant than not having its possession disturbed.
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Commercial Leasing Law & Strategy
Fees on Fees
Joseph I. Farca
Collecting the Legal Fees It Cost You to Collect Legal Fees
Does your New York commercial lease form expressly provide that the landlord may recover the legal fees it incurs to recover legal fees from its tenant? If not, then the landlord may be out of luck trying to recover such “fees on fees,” as they are known. But it wasn’t always this way.
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