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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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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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