Commercial Litigation

Commercial Leasing Law & Strategy

Options for Commercial Property Owners With Distressed Assets

William (Bill) Lobel

Cyclical challenges in the economy are nothing new, and 2022 is shaping up to be that kind of year for business owners nationwide. This is likely to result in a greater need for the services of bankruptcy attorneys as business owners face a mounting wave of distressed financial assets.

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Commercial Leasing Law & Strategy

Effects of Inflation on Commercial Real Estate

Steven J. Reed

While growth of the job market and the economy are the most important factors affecting commercial real estate, the emergence of historic rising inflation has its effects as well.

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Commercial Leasing Law & Strategy

Fifth Circuit Ruling Gives Commercial Lessees Likely Protection In Bankruptcy Court Free and Clear Asset Sales

Michael L. Cook

The Fifth Circuit signaled that it would not approve in later cases a bankruptcy court asset sale of real property that summarily cuts off the rights of the debtor’s lessees.

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Commercial Leasing Law & Strategy

PA Ruling Shows Power of Obtaining Mechanic’s Lien

Alan Nochumson and Clementa Amazan

In Pennsylvania, if a contractor is not paid for repairs or improvements made to real estate, the contractor can either take the traditional path of litigation and sue the property owner by filing a complaint under contractual or equitable theories or file for a mechanics’ lien that clouds title to the real estate.

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Commercial Leasing Law & Strategy

7 Concerns for Commercial Real Estate Investors In a Volatile Market

Joseph J. Ori

It appears that the CRE industry is entering a period of high volatility with the Fed promising to raise interest rates, soaring inflation, the war in…

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Commercial Leasing Law & Strategy

How the SEC’s ESG Disclosure Rules Might Effect Commercial Real Estate

Erik Sherman

After years of discussions and hints, the Securities and Exchange Commission (SEC) finally released its proposed environmental disclosure rule for public company reporting. Getting the information and making the determinations will be a challenge for any sized company that comes under the SEC’s purview. But there are significant questions about who is responsible for gathering and reporting information from commercial real estate facilities.

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Commercial Leasing Law & Strategy

Don’t Forget to Read Those Condominium Documents

Mark Morfopoulos

No matter how carefully you reviewed the lease, if you don’t read the condominium documents you could be missing critical information relating to the unit and the building that is available only by reviewing the condominium documents.

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Commercial Leasing Law & Strategy

Opportunities and Best Practices for Lenders In Financing Distressed Business Acquisitions

Joel H. Levitin and Richard A. Stieglitz Jr.

As distressed M&A activity inevitably heats up, strategic buyers and equity sponsors that have sat on the sideline for an extended period of time will likely have expanding interest in purchasing viable, but over-leveraged, businesses that are being sold out of bankruptcy.

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Commercial Leasing Law & Strategy

Second Circuit Narrows Borrower’s Ability to Pursue Class Damages In Federal Court for Failure to Timely Record Mortgage Satisfactions

Jonathan Robbin

The decision in Maddox v. Bank of N.Y. Mellon Trust certainly affords safeguards to lenders and mortgagees in that Maddox now narrows a borrower’s ability to pursue class damages in federal court for lenders and services for failure to timely record mortgage satisfactions.

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Commercial Leasing Law & Strategy

Short-Term Leases Can Create Value Uncertainty

Erik Sherman

When executives aren’t sure what normal will look like in where employees work, they can’t tell how much office space they need. While some sectors of commercial real estate are stable in terms of tenants, others are a question. That’s leading to some pushing for shorter-term leases — ironically, both by tenants and some owners — as well as headaches for underwriting as the predictability of tenancy is up in the air.

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Commercial Leasing Law & Strategy

Common Issues In Commercial Property Bankruptcies

Robert K. Scheinbaum and Philip W. Allogramento III

As the commercial real estate market undergoes seismic shifts, companies may find themselves in situations where their tenant or their landlord has filed for bankruptcy protection. Questions then quickly arise, such as if and how a landlord may evict a bankrupt tenant, whether a bankrupt tenant may remain as a lessee and continue to occupy the premises, and how to measure damages for a landlord in this situation, both before bankruptcy and going forward post-petition.

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Commercial Leasing Law & Strategy

Strategies and Drafting Techniques for Loan Workouts and Enforcement In 2022

Richard S. Fries

A series of strategies and drafting techniques relevant to commercial real estate loan workouts and enforcement. This article isn't a “how-to” primer on loan enforcement or restructuring the distressed loan, it identifies some of the current solutions and insights that have been observed, implemented and proposed during this pandemic-impacted workout cycle.

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Commercial Leasing Law & Strategy

Why Commercial Insurance Prices Are Rising

Ted Knutson

Commercial insurance prices are rising as increased costs from climate change, the supply chain crisis and inflation take hold, Westchester, a commercial property, and casualty insurance underwriter, said in a new report.

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Commercial Leasing Law & Strategy

Tenth Circuit: Government COVID Closure Orders Do Not Trigger Coverage for Loss of Business Income

Stephen Masciocchi and Tina Van Bockern

In a recent case, the Tenth Circuit joined other circuits in holding that government closure orders due to the COVID-19 pandemic do not trigger insurance coverage for loss of business income, reasoning that the temporary inability to use property caused by COVID shutdown orders doesn’t involve a covered physical loss of property.

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Commercial Leasing Law & Strategy

Pros and Cons of Master Leases

Peter E. Fisch and Salvatore Gogliormella

Section 365 of the Bankruptcy Code grants debtors the ability to assume or reject any executory contract or unexpired lease. Debtors must assume or reject a lease in its entirety and are not free under Section 365 to assume only favorable provisions of a lease. Courts, however, have consistently held that they will not find a multi-property master lease to be a unitary lease merely because such properties are demised in a single document.

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Commercial Leasing Law & Strategy

Pleading Alter Ego Liability In Commercial Lease Disputes

Efrem Z. Fischer and Edward E. Klein

The COVID-19 pandemic has challenged commercial landlords to rely on various legal theories to protect their legitimate rights. As federal, state and local governments enact laws to protect tenants from evictions and/or the enforcement of personal lease guarantees, a landlord’s counsel must seek avenues to press its clients’ rights against any entity who may be liable for outstanding rent arrears due and owing under a commercial lease.

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Commercial Leasing Law & Strategy

Five Things Law Firm Leaders Need To Do As People Return to the Office

Mark Beese

While we all look forward to returning to normal, the normal we left in early 2020 remains elusive. For those who are leading teams (such as executive committees, practice and industry groups, client teams, administrative departments, and firm committees), the struggle is more complex.

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Commercial Leasing Law & Strategy

COVID-19 and Lease Negotiations: Tenant Security

Ann E. Ryan and Adrienne B. Koch

The pandemic has highlighted vulnerabilities in two of the most popular forms of tenant security — guaranties and cash security deposits. This article examines the impact of the pandemic on each of those types of security and offers some suggestions for landlords going forward.

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Commercial Leasing Law & Strategy

Selective Reassessment of Only Commercial Properties Violates the Uniformity Clause

Alan Nochumson and Clementa Amazan

The Commonwealth Court of Pennsylvania recently analyzed whether the City of Philadelphia’s selective reassessment in tax year 2018 of only commercial properties at current market value violated the Uniformity Clause and the Assessment Law’s requirement that the City assess all properties annually at actual market value.

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Commercial Leasing Law & Strategy

NY Appellate Courts Defer to Board of Standards In Zoning Cases

A recent case in New York's First Department highlights the extreme deference appellate courts accord Board of Standards and Appeals (BSA) determinations interpreting the extraordinarily complex zoning scheme.

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The Bankruptcy Strategist

Retention of Title Disputes: Don’t Take the Uniform Commercial Code for Granted

Eva D. Gadzheva, Jeremy M. Downs and David E. Morrison

This article reminds us of the conflict-of-laws analysis at the heart of such retention of title disputes, and then discuss the multi-step UCC analysis that is also required.

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Commercial Leasing Law & Strategy

COVID-19 and Lease Negotiations: Casualty Provisions

Ann E. Ryan and Adrienne B. Koch

First in series of articles that will examine specific aspects of the COVID shift in which commercial lease negotiations are seeking protection against unlikely events. Part 1 focuses on casualty provisions.

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Commercial Leasing Law & Strategy

Migrating Businesses Help Grow South Florida CRE Market Despite, and Because of, the Pandemic

Melea VanOstrand

The South Florida office market has seen a shift due to COVID, with some downsizing and modifications of office buildings, but the influx of new potential tenants has helped mitigate any potential downsides other markets may have seen.

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Entertainment Law & Finance

Proposed Changes In UCC Address Virtual Currency Financing

Barbara M. Goodstein

Financial institutions are beginning to accept virtual currencies as collateral for financings. Could this become common for independent film productions and other entertainment industry ventures? This article examines the scope of UCC Article 9 with a focus on virtual currencies, taking into consideration issues of classification and perfection.

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Commercial Leasing Law & Strategy

Say it Ain’t So! Tortious Interference with a Sublease By a Master Landlord

Marisa L. Byram and Tyler V. Friederich 

A South Carolina appellate court recently affirmed a trial court’s decision that a landlord had tortiously interfered with a sublease by terminating the master lease after a fire damaged the subject building and such landlord was liable to the subtenant for punitive damages.

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Commercial Leasing Law & Strategy

Force Majeure Clauses In Construction Contracts In the Aftermath of COVID-19

Jeffery R. Mullen and Fred Warren Jacoby

We are only beginning to scratch the surface of the effect on the construction litigation visited on us by COVID-19-related impacts. However, the pandemic and its continuing impact has reinforced the importance of planning for the unexpected — and undefined — when negotiating construction contracts.

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Commercial Leasing Law & Strategy

Frustration-of-Purpose Use In Commercial Leases During the Pandemic

Joshua Wurtzel

The use of the frustration-of-purpose doctrine to absolve commercial tenants of their obligation to pay rent could signal headwinds for the commercial real estate market — and the economy more generally.

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Commercial Leasing Law & Strategy

Strategies for Creating Value In Today’s CRE Market

Joseph J. Ori

A look at some value-added strategies a commercial real estate owner/manager must adopt to create value in this tough environment.

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Commercial Leasing Law & Strategy

Issues Relating to RLUIPA Safe Harbor and the Equal Protection Clause

Steven M. Silverberg

Recently the United States District Court for the Southern District of New York grappled with issues relating to local zoning restrictions on houses of worship.

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Commercial Leasing Law & Strategy

COVID-19’s Impact on Real Estate Valuations

Michael Rikon

Valuation of real estate during contemporary times is challenged and will continue to be so for several years. In a forced sale, a court should only consider pre-COVID-19 data whether it be comparable sales from 2018-2019, or financial data from the same period.

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Commercial Leasing Law & Strategy

Confession of Judgment Provisions In Commercial Leases

Megan E. Moyer and Kevin M. Levy

In states where they are enforced, a properly drafted confession of judgment clause in a commercial lease can be one of the most valuable tools in a landlord’s toolkit for enforcing its leases and preserving its remedies.

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Commercial Leasing Law & Strategy

Government Policies Could Be Concern for Commercial Real Estate Lenders

Les Shaver

Significant concerns aren’t necessarily issues caused by real estate lending, borrowing or underwriting. They’re caused by government policy.

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Commercial Leasing Law & Strategy

Negotiating with Small Office Tenants on Pandemic Issues

Erika Morphy

Small businesses make up the backbone of the commercial office sector. Until recently, by virtue of their small size, they had little sway with landlords when it came to renegotiating or negotiating a lease. Then the pandemic happened.

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Commercial Leasing Law & Strategy

Drafting a Fair Force Majeure Provision In the Wake of COVID-19

Scott R. Lippert and Darcy Baboulis-Gyscek

Only a handful cases have addressed force majeure clauses in commercial real estate agreements in the wake of the pandemic, which has produced conflicting views as to whether performance was excused.

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Commercial Leasing Law & Strategy

Retail Lease Workout Trends Show ‘We’re All In This Together’

David Samole

There have been plenty of cases during the pandemic that shape the landlord-commercial tenant dynamic both in Chapter 11 bankruptcies and in workouts.

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Commercial Leasing Law & Strategy

New Normal Will See Shift In How Commercial Real Estate Is Done

Aron Solomon

By moving away from demand for traditional offices and office space, employers will be able to select from a much broader range of talent and a much greater geographical range of places to find and use these employees.

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Commercial Leasing Law & Strategy

Underwriting Adjusts As Pandemic Continues

Erika Morphy

Underwriting clearly has been affected by the pandemic-led downturn. Lenders are using higher vacancies and reserves to underwrite, leading to more conservative loan proceeds.

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Commercial Leasing Law & Strategy

Law Firms Should Take Advantage of Tenant Market Post-COVID-19

Timothy M. Hazel and Gaetan J. Alfano

Due to COVID-19’s impact, the commercial office market should fundamentally shift in favor of tenants for the next several years. Law firm tenants should find an environment characterized by friendly concessions, options across asset classes and price ranges, and limited competition for space.

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Commercial Leasing Law & Strategy

Office Market Recovery Brings Opportunity

Les Shaver

The office market weathered a pandemic-fueled revolution last year, but both owners and tenants responded with impressive adaptability and endurance. Those things bode quite well for the sector’s recovery.

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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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