1 / 15

NAI Global Conference “ Office Lease Issues:  Where the Broker Makes a Difference !”

NAI Global Conference “ Office Lease Issues:  Where the Broker Makes a Difference !”. James A. Hochman February 4, 2014. LETTERS OF INTENT:  BINDING, NON-BINDING, OR BOTH?. Who drafts the LOI? For what purpose? Benefits of a non-binding LOI Binding LOI?.

elise
Download Presentation

NAI Global Conference “ Office Lease Issues:  Where the Broker Makes a Difference !”

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. NAI Global Conference“Office Lease Issues:  Where the Broker Makes a Difference!” James A. Hochman February 4, 2014

  2. LETTERS OF INTENT:  BINDING, NON-BINDING, OR BOTH? • Who drafts the LOI? • For what purpose? • Benefits of a non-binding LOI • Binding LOI?

  3. COMMON AREA MAINTENANCE CHARGES: WHAT IS INCLUDED, WHAT IS EXCLUDED, AND CAN WE TALK? • Maintenance and Repair v. Capital Expenses. •  Management fees. • Gross Up?  I hope not!

  4. RIGHTS TO AUDIT CAM CHARGES: TENANTS MUST HAVE THEM! • First, a litmus test: If a LL refuses audit rights, you need to ask why! • Where are the records and where is the audit to take place? • How long does T have to review LL’s annual reconciliation? • Who pays for the audit? • What is a “fair” margin for error?

  5. CASH SECURITY DEPOSITS:  ARE THEY REALLY SECURITY, AND ARE THEY REALLY A GOOD IDEA? • Benefits to LL? • Benefits to T? • Alternatives to a cash security deposit? • Letter of Credit.

  6. ASSIGNMENT AND SUBLEASE:  IS THERE ROOM FOR COMPROMISE? • Difference between Assignment and Sublease. • Will a LL ever consent to assignment? • What a LL needs: Certainty. • What a T needs: Flexibility. • Use could be an issue, especially in retail and industrial property. • Consent: Under what circumstances?

  7. EMINENT DOMAIN: DO WE DIE TAKING THIS HILL OR JUST LET IT RIDE? • What is to be gained for the T? Separate damages for loss of lease, loss of fixtures, relocation costs. • What is LL’s concern? No reduction of LL’s award. • How likely is condemnation, given the location of the property? • Real concerns: Parking and access.

  8. HOLDOVER RENT: IS THE RENT THE KEY ISSUE OR IS THERE MORE? • LL wants 200% of prior rent. • T counters at 125%. • They settle at 150%. • What is the REAL issue? How about consequential damages?

  9. OPTIONS: JUST GRAVY OR ARE THEY THE REAL MEAT AND POTATOES? • LL wants certainty. • T wants flexibility. • Who can determine the future rental market? • What if the parties employ 3 “experts”? • Right of First Refusal v. Right of First Offer: Reasonable substitute? Why not?

  10. RIGHT TO RELOCATE: REALLY? HOW DID THAT HAPPEN? • Why LL needs one. • Why T fears this event. • Can T make lemonade from this lemon? • Who has the leverage? • The question might just be: Will this ever happen?

  11. GUARANTEES: FOR ALWAYS OR JUST FOR AWHILE? • Personal. • Joint and several. • Forever? • Burnoff? • Dividing Mama from Papa: Why not?

  12. RULES AND REGULATIONS: JUST ANOTHER EXHIBIT, OR ARE THERE IMPORTANT ISSUES HERE? • Do the rules impose limits on T’s use? • Do the rules provide protection to the T? • Are the rules carved in stone? Isn’t THAT the bigger issue?

  13. THE BROKER CLAUSE: WHY IT IS MORE THAN MERE RECOGNITION, IT’S A MONEY ISSUE! • Naming the broker(s) can constitute an admission of procuring cause and commission liability. • Should include cross indemnity against claims of others (the parachuting broker), and the indemnity should extend to the named brokers. • Is there a promise to pay the commission? • What are third party beneficiary rights? • Can a broker sue (successfully) to collect a commission based on language in the lease? • Other value: How about lien rights?

  14. TAMING THE WILD ATTORNEY: IT CAN BE DONE, AND HERE’S HOW.  • Collaborate. • Joint lease comments presented together. • Make sure the attorney has the LOI and sticks to it. • Understand attorneys, we were raised differently, and scarred in the process. • Ask questions (we love to be the answer grape).

  15. QUESTIONS? James A. Hochman Arnstein & Lehr LLP 120 South Riverside Plaza Suite 1200 Chicago, Illinois 60606 Work: (312) 876-7181 jahochman@arnstein.com http://www.arnstein.com/james-a-hochman www.arnstein.com

More Related