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Commercial Leasing Law & Strategy
Foreclosure Statute of Limitations
Stewart E. Sterk
In a set of foreclosure cases decided in late February, the Court of Appeals resolved some of the questions that have plagued New York’s court system in the aftermath of last decade’s mortgage crisis.
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Commercial Leasing Law & Strategy
Open Space and the Conundrum of High Stakes Zoning Disputes
Philip E. Karmel, James P. Colgate and Judith M. Gallent
The New York Court of Appeals’ recent decision in Peyton v. BSA held, in the context of a zoning lot containing several residential buildings, that the Zoning Resolution of the City of New York does not require an area to be accessible to all residents of the zoning lot for the area to qualify as “open space.”
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Commercial Leasing Law & Strategy
NY Court of Appeals Rules on Damages Clauses In Commercial Leases
Linton Mann III and William T. Russell Jr.
In The Trustees of Columbia University in the City of New York v. D’Agostino Supermarkets, the NY Court of Appeals split on the issue of whether the relevant damages clause in a commercial lease was unenforceable as a matter of law because it was so grossly disproportionate to the ascertainable amount due upon full performance.
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Commercial Leasing Law & Strategy
The Small Business Reorganization Act: How It Started. How it’s Going. Where to Next?
Jack O’Connor
This article provides a brief overview of the SBRA and these first several months of its use — especially in light of the COVID-19 pandemic — concluding that in 2021, Congress should permanently adopt the CARES Act’s expanded definition of a “small business debtor” as including businesses with up to $7.5 million in aggregate non-contingent liquidated debts.
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Commercial Leasing Law & Strategy
Challenges for Real Estate Lenders When Borrowers Default
Jeffrey Steiner and David Broderick
During periods of distress in the real estate industry, if a lender is not going to enter into a consensual workout or loan restructuring with their defaulted borrower, the lender will be presented with the choice of either enforcing rights under its loan documents or marketing and selling the distressed loan.
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Commercial Leasing Law & Strategy
Law Firms Renegotiating Leases to Reflect ‘New Normal’
Justin Henry
As their commercial leases approach expiration and renewal, law firms are renegotiating the future of in-office legal work. For many, the “new normal” will feature an efficient floor plan that deemphasizes personal offices while paradoxically accommodating a growing attorney headcount.
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Commercial Leasing Law & Strategy
Floor Area Bonuses Allowed for Mixed-Used Properties Under the Philadelphia Zoning Code
Alan Nochumson and Clementa Amazan
Part Two In a Series
In this part of the series on “zoning” bonuses in the city of Philadelphia, we explore Floor Area Bonuses provided under the Mixed Incoming Housing, Green Building, and Underground Accessory Parking & Loading Bonuses.
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Commercial Leasing Law & Strategy
Commercial Real Estate Lenders Face Remedy or Relief Decision In COVID-19
Peter E. Fisch and Salvatore Gogliormella
Lenders in default scenarios face a choice of whether to exercise remedies and take over their collateral, or offer relief measures to their borrowers, either in the form of short-term forbearance or a permanent loan modification.
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Commercial Leasing Law & Strategy
Lease Default Provisions Face Scrutiny During COVID-19
Warren A. Estis and Alexander Lycoyannis
As rent defaults skyrocket in 2020, practitioners reviewing the default provisions in their clients’ commercial leases must ask themselves a crucial question: Does the provision set out a conditional limitation or a condition subsequent?
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Commercial Leasing Law & Strategy
Possible Long-Term Impacts of COVID-19 on Commercial Real Estate
Steve Vainder
While it is likely that the long-term impact of COVID-19 on commercial real estate will be significant, the short-term effect may be to accelerate sector and geographic trends that were already prevalent before the pandemic emerged.
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Commercial Leasing Law & Strategy
Valuations Forecasted to Decline in COVID-19’s Wake
Rayna Katz
Taking a pulse on the impact of the pandemic on all sectors of global commercial real estate, valuation firm Duff & Phelps, in conjunction with the GRI club, surveyed over 300 directors on the state of affairs.
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Commercial Leasing Law & Strategy
Density and Dimensional Bonuses Allowed for Mixed-Used Properties Under the Philadelphia Zoning Code
Alan Nochumson and Clementa Amazan
Part One in a Series
Over the years, the city government has amended the Philadelphia Zoning Code to include incentives to increase the amount of housing units as well as the size of such building structures. Over the course of several articles, we will be discussing the “zoning” bonuses a property owner can take advantage of when developing a property within city limits. This part delves into the Mixed Income Housing Bonus, Green Roof Bonus, and the Fresh Food Market Bonus.
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Commercial Leasing Law & Strategy
New York’s Commercial Lease Defenses to Paying Rent
Adam Leitman Bailey and Dov Treiman
Few landlords and commercial tenants have been completely immune from the governmentally imposed economic shutdown and COVID-19’s wrath. Not including what may have been negotiated in a commercial lease, there are three traditional theories under which commercial tenants could seek to assert entitlement to forgiveness of their rent.
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Commercial Leasing Law & Strategy
COVID Shutdown Orders vs. Statutory Rent Obligations
Brett S. Theisen and Mark B. Conlan
Even though payment of post-petition rent under a nonresidential lease (prior to rejection) has historically been an absolute requirement, bankruptcy courts, as courts of equity, have the ability during these extraordinary times to take a more flexible approach. This clearly is an evolving trend that should continue for at least the duration of the pandemic and perhaps beyond, as bankruptcy judges and practitioners seek out creative and unique responses to difficult issues.
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Commercial Leasing Law & Strategy
COVID-19 Related Governmental Shut Down Order Triggers Force Majeure Provision In Restaurant Leases
Marisa L. Byram
As we all expected, cases are being brought and decided on the issue of whether the COVID-19 pandemic and related governmental shut down orders trigger force majeure clauses in commercial leases and operate to excuse the performance of commercial tenants. While force majeure clauses vary widely, a recent decision from an Illinois Bankruptcy Court may provide guidance to help resolve disputes without resorting to the courts.
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Commercial Leasing Law & Strategy
NYC Law Providing Relief for Commercial Tenants Faces Constitutional Scrutiny
Ian Steinberg
New York City Mayor Bill de Blasio delivered another striking blow to property owners when he signed into law N.Y.C. Council Int. No. 1932-A (2020) on May 26, 2020. The new legislation prohibits landlords from enforcing personal guaranties on certain commercial leases for defaults occurring between March 7, 2020 and Sept. 30, 2020.
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Commercial Leasing Law & Strategy
New York’s Commercial Lease Defenses to Paying Rent
Adam Leitman Bailey and Dov Treiman
Not including what may have been negotiated in a commercial lease, there are three traditional theories under which commercial tenants could seek to assert entitlement to forgiveness of their rent: frustration of purpose, impossibility of performance, and force majeure.
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Commercial Leasing Law & Strategy
Commercial Real Estate Market Lags Behind Residential Rebound
Phillip Bantz
National Association of Realtors Survey Shows Most Commercial Tenants Struggling to Pay Rent
While the residential real estate market is experiencing what appears to be a swift rebound from the coronavirus-induced slump, the commercial landscape still looks relatively bleak.
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Commercial Leasing Law & Strategy
Twitter Chat Recap
Several members of Commercial Leasing Law & Strategy’s Board of Editors and contributors to Law.com and our ALM sibling GlobeSt.com took part in a Twitter chat on “Do We Need Offices Anymore?”
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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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