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As a condition to entering into a new lease, landlords often require a guaranty of lease from a personal or corporate guarantor in connection with those tenant entities that do not have either a high enough net worth or annual revenue, or for whatever other reasons do not meet the landlord’s financial criteria. A guaranty of lease is a covenant by the guarantor to be responsible for the obligations of the tenant. For example, for a tenant business set up as a new limited liability company that has one or two principal owners, the landlord will likely require that the owners personally guaranty the tenant’s obligations under the lease because the limited liability company would have little or no assets and no track record. Or for a tenant entity that is a wholly owned subsidiary of a parent corporation, the landlord will likely require that the parent corporation serve as the guarantor. In these examples, a selective landlord would not enter into the lease without the tenant offering a creditworthy guarantor.
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Second Circuit Likely to Deliver Big Win for Commercial Shopping Center Lessor
By Michael L. Cook
The U.S. Court of Appeals for the Second Circuit, on remand from the Supreme Court, further remanded to the district court the key issue of whether the Chapter 11 debtor gave “adequate assurance of future performance of” a commercial real property shopping center lease “as required by the Bankruptcy Code after the debtor’s assignment of its lease.
Adaptive Reuse of Vacant Office Buildings
By David Freylikhman and Sarah E. Michigan
While transforming existing buildings for alternative purposes is not a new concept, this article seeks to explore the feasibility of alternative repurposing options with a focus on pre-existing office buildings; namely, converting vacant office space into vertical farms or cannabis growth operations.
Is A Real Estate Instrument Filing Fee An Unauthorized Tax?
By Cameron Macdonald
Local governments have significant leeway to charge fees for services they provide their residents. But fee revenue sources can be attractive options for those local governments needing to fill budget gaps without raising taxes.
Climate Issues Becoming More Critical for Commercial Real Estate Development
By Richard Berger
Considerations for severe weather and climate, in general, have real estate developers putting more focus on how they build and operate. But add to that rising insurance rates, which have dealt a big blow to budgets as premiums continue to climb.
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