Day One: 9:00 a.m. - 5:00 p.m.
Morning Session: 9:00 a.m. - 12:15 p.m.
9:00 Changing Lease Forms and Negotiating Tactics in the New Improving Economy
- Lease forms expanding again
- Econometric layering of “theft by lease” – re-bundle operating expense into fixed rent – anticipate inflation of escalations
- In market recovery – Landlord’s need to close deals quick – tenants at premium
- Owners need to commence rent more quickly – reduce leasing legal fees
- Lease takeover loan/agreements tools
- Accelerate the many moving lease commencement dates – remove the risk
- Mock negotiation on getting all superior interests to the table
Michael E. Meyer, John Busey Wood
10:00 Unanticipated Limitations in Long-Term Planning
A. Assignment and Subletting
- An overview
- Permitted transactions
- Recapture rights and profit-sharing
- Recognition agreements and consents
- Structural impediments to assignment and sublease rights
B. Creating Flexibility, Evaluating Your Options and Negotiating the Deal
- How to create flexibility in the lease?
- Renewal and expansion rights, including rights of first refusal, rights of first offer, and fixed expansion rights
- Early termination rights and partial kick outs
Nancy Ann Connery, Michael E. Meyer
11:00 Networking Break
11:15 Strategies and Tactics for Negotiating Today’s Tenant Options
- Fixed versus floating expansion spaces; setting the triggers, delivery windows and response times
- Fixed rental rate versus then-current market rent; when should landlord have to re-offer declined right of first refusal space?
- Overlapping and cascading options; creating multiple rights – structuring around other tenants’ existing and future senior rights
- “Personal” options, minimum occupancy requirements and other ways to forfeit a tenant’s option
- Calculating termination and contraction fees; reconfiguring a multitenant floor, who pays and who chooses?
Joanne Franzel, Steven D. Klein
Afternoon Session: 1:15 p.m. - 5:00 p.m.
1:15 Use of “Off-Balance Sheet” Financing; Ground Leases – Fundamentals of Structuring for Buildability and Financing
A. Good Guy Guaranties and Takeover Leases
- Off-balance sheet – springing obligations
- “The gap” period obligations – “backdoor expanded personal liability”
- Bankruptcy impact
- Hot topics – backdoor liability accelerations – “lease takeover triggers!”
- How to secure the payment and performance of the “lease taken over”
- Representing a landlord in negotiating a restructuring of a tenant lease
- Emergence of the equity or cash flow participation lease
- Credit enhancements
- Use of letters of credit
B. Ground Leases – Fundamentals of Structuring for Buildability and Financing
- 99 years is a long time; periodic rent resets and other special clauses addressing the unknown
- Tenant rights at their most extensive; the true economic owner; protecting the leasehold mortgagee; special cases of condemnation and casualty
- Issues in ownership transition; recognition agreements for subtenants; reversionary rights and end of the term decision-making
Steven M. Alden, Michael Kerstetter, John Busey Wood
2:45 Hot Topics for Dealing With Long-Term Lease Structures, Audits and Credit Support
- Where are we with new FAS-13 and what is the impact on the structure and negotiation of long-term leases? What is the importance of tenant’s audit rights?
- Hear how vacancies and historically incorrect gross-up adjustments are serving to
– overcharge in-place tenants
– understate landlord’s NOI
– understate management costs and taxes for base years
- Learn how “green leases” and “green buildings” are leading to the development of new profit centers for landlords – new “green maintenance” laws
- Find out how REITs are shifting corporate office costs to building tenants via allocations at an unprecedented rate. How is this impacting tenants?
- Understand how new insurance products are being used to transform lease structure
- Letters of credit – don’t get surprised later by the “fine print”!
Edward Harris, Steven Serota, John Busey Wood
3:45 Networking Break
4:00 Ethical Gaps, Mishaps and Traps in Real Estate Practice
- Engagement letter gap
- Conflicts issues arising from outside counsel’s dealings with in-house counsel acting as owner/officer of property management company, and independent counsel versus in-house counsel acting as a party to the transaction
- Virtual office, multijurisdictional practice/unauthorized practice concerns/confidentiality problems
- Bottom line for attendees: what is my practical procedural strategic plan to deal with conflicts, keep the fee and keep the client?
Devika Kewalramani, Michael E. Meyer, John Busey Wood
Day Two: 9:00 a.m. - 4:30 p.m.
Morning Session: 9:00 a.m. - 12:45 p.m.
9:00 Challenges in Building Today’s Tenant Improvements
- Practice tip! High value property – selling pieces of the property – future condominium declaration
- Hot topic – later creation of multiple superior interests and impact on expansion and option rights
- Timeline of creation of interests – impairment of rights – securing the landlord work/$
- Negotiations of the SNDRA – “R” is for full recognition – deal with the lender in beginning – abatements and credits for landlord’s work funded by tenant loan!
- Purchase extensions and options may not work after conversion
- Bring the lender and security interest holders to the table first – secure the landlord’s work funding and related rental credits/abatements – hot topic – loss of abatements and offset protections
- Owner in workout will not fund TI or brokerage commission – tenant the “equity investor”
Michael E. Meyer, John Busey Wood
10:00 Complex Real Estate Issues: Arbitration vs. Litigation
- Costs of litigation and discovery as well as absence of cases or judgments
- Establishing minimum qualifications for arbitrators in arbitration provisions and selection process
- Hot topics – current increase in “baseball panel arbitration”
- Use of advocate arbitrators – use of one neutral or three neutrals
- Impairing and invalidating the award
- Compartmentalize the process – surgical arbitration for a clause only
- Creation of the arbitration forum – drafting good and bad clauses
- Practice tip: hidden issues in fair value market determinations
Michael A. Marra, Elizabeth J. Shampnoi, Thomas M. Ventrone, John Busey Wood
11:30 Networking Break
11:45 Dealing With Large Hidden “Big Ticket” Items
- The “grandfathered” laws and enacted not effective late triggers – new tenant filing plans – pulling permits – new laws for sprinklers and electric meters
- Pre-existing noncompliance permit delay for existing building or space violations
- Triggered violations from deferred but enacted laws on filing of plans and demolition
- Costs included in CAM and operating expenses/capital disbursements – landlord build to suit but no cash and “under supervision” – how to protect the “turnkey”
- Negotiating “work/TI” funding/completion rights and with the lender or special servicer and for “recognition of landlord’s work abatements and credits” – tenant pays the broker for the servicer? Future “delivery space” TI funding
- Current failure to analyze and assure the “attached sketch” – compliance, use, repair obligations and “the missing terrace! . . .
the added building systems!”
- Sprinklers, electric meters and VAV boxes – analyzing landlord’s “base building” inclusions
- Mock negotiation
Michael E. Meyer, Jacqueline A. Weiss, John Busey Wood
Afternoon Session: 1:45 p.m. - 4:30 p.m.
1:45 Hot Issues in Retail Leasing in the Current Environment
- Use clauses and tradenames
- Exclusive use rights
- Opening and operating covenants
- Co-tenancy rights
- Assignment and subletting
- New issues facing landlords and tenants in the current retail environment
- Use of “pop-up occupancies” in malls – impact of “temp operating agreements”
- When the co-tenancy and “kick-out” for low gross sales needs confirmation – problems of enforcement
- Early delivery and opening agreements while lease is being negotiated
Theani C. Louskos, M. Rosie Rees, John Busey Wood
3:15 Networking Break
3:30 Issues Surrounding Insurance and Damage and Destruction
- Effect of the financial crisis on insurance
- Who insures the insurer?
- Coverage of catastrophic risks – coordinating the insurers
- What the landlord needs and what the tenant needs
- ACORD forms now truly worthless! Use of binders?
Christine Chipurnoi, James A. Fenniman, Arthur E. Pape