Negotiating the Sophisticated
Real Estate Deal 2007
High Stakes Strategies in Challenging Times
NEW YORK CITY, APRIL 23-24, 2007
Why You Should Attend
Who Should Attend
In today’s challenging real estate market, you need to be current
on the changing environment for sophisticated commercial
property transactions. Nationally known real estate lawyers
involved in today’s newsworthy, high-profile transactions will
share their expertise of both classic transactional sales and the
different needs of today’s and tomorrow’s marketplace.
•
•
•
•
•
•
•
How do you negotiate deals in the the current hyperactive and
high-priced real estate market? In what ways has the revolution
in financing sources, including REITs, securitized financing and
unleveraged funds, changed the issues and priorities involved in
acquisition and sale transactions? How do the characteristics of
a property and the structuring of the acquisition fit with the
current needs of lenders? Which provisions in a sales contract
are critical, and which ones are tradeoffs? What is the best
strategy to remedy a defaulted contract? Which are the key tax
concerns? You will learn the answers and much more from some
of the best real estate lawyers in the country.
What You Will Learn
• NEW! Preemptive bids: A lawyer’s nightmare or dream?
• UPDATES!
- The best techniques for negotiating under current market
conditions
- The issues of REITs, including REITs as purchasers—
Operating Partnership Units as currency
- Joint Ventures: Critical areas to address, and remedies
and responses for when they fail
• How to address the concerns of financing sources
• Which representations and warranties do you really need?
• The role of the real estate investment banker and real estate
advisor
• Special issues in representing the purchaser, including entity
formation, existing financing, marketable title and title
insurance, 1031 exchange, parking rights, labor issues,
estoppel certificates, and anti-flipping provisions
• Special considerations of “layered” ownership, such as tiers of
leases
• Strategies and remedies for breach of contract
• What risk areas may be acceptable to an individual investor,
but not to a security-oriented fund
Real estate attorneys
Investment bankers who acquire and sell real estate
Real estate executives
Asset managers and acquisition managers
Investment advisors
Bankers
Real estate advisors and consultants
PLI’s Nationally Acclaimed
Course Handbooks
All program attendees will receive a copy of the
Course Handbook. This softcover, bound volume
was prepared specifically for this program and
will also stand alone as a permanent reference.
PLI’s Course Handbooks represent the definitive
thinking of the nation’s finest legal minds, and
are often the standard reference in the field.
View PLI Seminars In Your Home Or Office
With PLI’s We b S e g m e n t s there is no easier way to complete
your MCLE requirement. We’ve taken PLI’s extensive library of
On-Demand Web Programs, previously recorded programs
available online 24/7 via streaming video and/or audio, and
conveniently broken them down into 1/2 - 3 hour programs so
you get only the information you want. With over 1,000 hours of
content to choose from, you’re sure to find a Web Segment that
will meet your needs. As an added bonus, you’ll continue to have
access to your Web Segments for one full year and will be able
to download the online Course Materials that accompany your
Web Segment. At more than 60% off the regular price, there’s
never been a faster, easier, more affordable way to meet your
state MCLE requirement.
PLI’s Guarantee
It’s simple. If you’re not completely satisfied with the return on
your investment from any PLI program, your money will be
refunded in full.
Reserve your place today, call (800) 260-4PLI.
PLI NEWS (ISSN 0479-0219), published triweekly on Monday, Wednesday and Friday from January to August and semi-monthly on Wednesday from September to December by
Practising Law Institute, 810 Seventh Avenue, New York, NY 10019. Periodicals Postage Paid at New York, NY and at additional mailing offices. Printed in the United States.
Vol . 44, N o. 40, A pri l 2, 2007. P OS TM AS TE R: Please send address changes to PLI News, Practising Law Institute, 810 Seventh Avenue, 25th Floor, New York, NY 10019.
Program Schedule
Please plan to arrive sufficiently in advance of the conference start time to register.
A continental breakfast will be available upon your arrival.
First Day: 9:00 a.m. – 5:00 p.m.
Morning Session: 9:00 a.m. - 12:30 p.m.
9:00
Introduction and Opening Remarks
12:30
Lunch
Afternoon Session: 1:30 p.m. - 5:00 p.m.
Preemptive Bids: A Lawyer’s
Nightmare or Dream?
9:15
Market Overview
• State of the market
• Role of the real estate advisor/consultant
• Who makes the market?
• What factors achieve the highest pricing?
• Where is this market heading?
1:30
Darcy Stacom
Jonathan L. Mechanic
9:45
•
•
•
•
•
•
•
•
•
Purchaser Due Diligence and
Contract Issues
Understanding the property; structuring issues
Income tax impact
State of title and title insurance
Local laws; zoning; violations
Physical conditions
Purchaser contingencies
Service and maintenance contracts
Due diligence period vs. hard contract
Physical inspection reports
Stephen A. Cowan, Martin D. Polevoy
10:30 Break
10:45 Seller Due Diligence and Contract Issues
• Parking rights; labor issues
• Estoppel certificates
• New York Style vs. escrow closing
• Negotiating style — hard nosed vs. conciliatory
• Purchase money mortgage issues
• Adjustments at closing; anti-flipping provisions
• What does marketable title really mean?
• Failure of seller to perform under contract
• Time of the essence contracts and default issues
Stephen A. Cowan, Martin D. Polevoy
11:30
Acquisition Financing Techniques, Including
Purchase Money Financing and Other
Strategies
•
•
•
•
•
•
•
•
•
•
•
Purchase money financing
Where it works and where it does not
Typical loan terms
Contrast to typical institutional first mortgage
Mezzanine financing
Relationship to capital structure
Pricing, participations, conversions
Nature of collateral security
Conforming to prohibitions in senior debt documents
Other financing techniques
Credit enhancements
- Guaranties
- Letters of Credit
• Equity participation
• Convertible leaseholds
Robert J. Ivanhoe
•
•
•
•
When are preemptive bids effective?
The positive and the negative
Legal considerations
Business considerations
2:30
Joint Ventures: Critical Areas
That Must Be Addressed
• Establishing the purpose and form of the joint venture
• Governance and management
• Protection of the interests of the developer/operator, and the
investor/equity member
• Capital calls and capital contributions
• Dispute settlement mechanisms
• Compensation structures, including carried interests, preferred
returns, priorities
• Control of major decisions: Financing, development, change of
purpose, sale
Alan J. Pomerantz
3:15
Break
3:30
Joint Ventures: Remedies and Responses
When Joint Ventures Fail
•
•
•
•
•
•
Shortfall coverage issues and squeeze downs
Buy/sell provisions
Management agreement issues in a failed joint venture
Defining powers of the Managing Member
Decisions requiring unanimous approval
UBIT concerns
Andrew C. Williams
4:15
Construction Financing
• Lender-borrower issues
• How to deal with the third parties involved
• Stress points
• Disbursements
• Mixed-use projects: Office-retail, hotel-residential
Meredith J. Kane
Second Day: 9:00 a.m. – 4:45 p.m.
Morning Session: 9:00 a.m. - 12:30 p.m.
9:00
The Pragmatics of Negotiating the
Representations and Warranties
• Which should survive closing and for how long?
• What does “R & W the rent roll” really mean?
• What are the representations and warranties that a purchaser
must have or should have in a contract?
• What recourse does a purchaser have for a breach of the
representations and warranties?
• How do estoppel certificates relate to the representations and
warranties?
• How much latitude should a seller have as to incorrect
representations and warranties?
Lawrence J. Lipson, Chris M. Smith
10:15
Break
10:30 REITs as Purchaser and Seller
• The ”corporatization“ of real estate M&A transactions
• Complications of UPREIT transactions
• Doing deals based on publicly available information
• Restructuring models that haven't worked
• Defending REITs — excess share provisions and poison pills
• REIT M&A structuring issues
Robin Panovka
11:30
Utilizing the Title Insurance Company in
Complex Transactions—Expanding
Traditional Coverages
•
•
•
•
•
•
Traditional role of title insurance in commercial transactions
Casualty insurance vs. title insurance
Insuring off-record conveyances: Equity transfers
Evolution of new coverage
Covering the economics
Creditors’ rights issues
- Non-judicial foreclosure
- Deeds in lieu of foreclosure
- Preferences
- Fraudulent conveyances
• Making the most of endorsements
• Mortgage tax issues
Afternoon Session: 1:30 p.m. - 4:45 p.m.
1:30
•
•
•
•
The Advantages and Pitfalls of Utilizing
Letters of Credit in Real Estate Transactions
Codes governing letters of credit
Terms to include
“Evergreen” letters of credit
Upside and downside of using letters of credit
Nancy A. Connery
2:30
Break
2:45
Impact of Sales on Real Estate Tax Assessments
and Strategies to Minimize Such Impact
•
•
•
•
What do assessors know; how and when do they know it?
Methods of valuation
Price vs. market value
Offensive and defensive use of sales price by assessing
jurisdictions
• Sales and assessments in New York City
• Other real estate tax considerations for buyers and sellers
• Tax projections
William E. Banfield
3:45
Ethics and Malpractice Prevention
•
•
•
•
Conflicts of interest
Confidentiality
Dealings with non-attorneys
Computer-related risks
Patricia A. Wilson
Robert A. Simins
12:30
Lunch
Pro Bono Efforts
Since 1933, PLI has been the comprehensive resource for the
training and development needs of legal professionals. PLI is
heavily involved in pro bono and research and development
activities to ensure that all practicing attorneys and law students
remain on the cutting edge. These activities include awarding
full and partial scholarships to our institutes and programs,
assisting public interest organizations in their training needs,
and helping law students become first-rate attorneys by posting
free lectures on our web site and offering free MPRE courses.
For more information, go online to pro-bono.pli.edu.
PLI Scholarships
Please check the Registration Information section of this
brochure for more information about PLI scholarships.
F re e E m a i l N e w s l e t t e r s
T h e C o m p l i a n c e C o u n s e l o r features commentary to help you clear
the endless hurdles you and your clients face.
L a w y e r ’s To o l b o x features links to downloadable forms and checklists
that will keep you up-to-date on a range of current practice issues.
P o c k e t M B A provides everything an attorney needs to know about
finance.
A l l - S t a r B r i e f i n g presents thought-provoking insights to keep you at
the top of your game.
I n - H o u s e I n s i g h t s offers ideas law department managers can use to
manage outside counsel better, improve productivity, control costs, and
boost their value to the organization they serve.
Don’t miss a single issue! Go to www.pli.edu,
click on Free Newsletters and subscribe today!
Faculty
Chair
Martin D. Polevoy
DLA Piper US LLP
New York City
William E. Banfield
Alan J. Pomerantz
Podell, Schwartz, Schechter & Banfield, LLP
New York City
Senior Managing Director
Claremont Advisors
New York City
Nancy A. Connery
Robert A. Simins
Schoeman, Updike & Kaufman, LLP
New York City
Stephen A. Cowan
Executive Vice President & General Counsel - NY
Chicago Title Insurance Company
New York City
DLA Piper US LLP
San Francisco
Chris M. Smith
Robert J. Ivanhoe
Shearman & Sterling LLP
New York City
Greenberg Traurig LLP
New York City
Darcy Stacom
Paul Weiss Rifkind Wharton & Garrison LLP
New York City
Executive Vice President and Partner,
Investment Properties Institutional Group
CB Richard Ellis
New York City
Lawrence J. Lipson
Andrew C. Williams
Proskauer Rose LLP
New York City
General Counsel
Cornerstone Real Estate
Hartford, Connecticut
Meredith J. Kane
Jonathan L. Mechanic
Patricia A. Wilson
Fried, Frank, Harris, Shriver & Jacobson LLP
New York City
Professor of Law
Baylor Law School
Waco, Texas
Robin Panovka
Wachtell Lipton Rosen & Katz
New York City
Program Attorney: Howard G. Maurer
Other Relevant Products From PLI
Co urse H an db oo k
Ne got ia ti ng t he Sop hi st ic a ted R eal Es t at e
Dea l 2 0 0 7: Hi g h S t ak es St r a t eg i es i n
C h a l l e n g i n g T i m e s, $179. The Course
Handbook will be available on the first day of
the program.
For information on quantity order discounts,
please contact PLI’s Customer Relations
Department at (800) 260-4PLI.
Program attendees save up to 50%
on Books, Audio and Video Products.
Tr e a t i s e s
Ho l t z sch u e o n Re a l Est at e Co n t r a ct s ,
Se cond Ed ition
K a r l B . H o l t z s c h u e (Adjunct Professor,
Fordham Law School; former Partner,
O’Melveny & Myers, New York City)
H o l t z s c h u e o n R e a l E s t a t e C o n t r a c t s gives
you all the essential legal information, advice,
and tips you need to make real estate deals
proceed efficiently. Important reading for
brokers, title insurers, and inspectors as well,
H o l t z s c h u e is the only single-volume, step-bystep, plain-English guide for both sides in
residential and commercial real estate
transactions. The comprehensive Index will help
you find the answers to all your questions.
1 looseleaf volume, 762 pages, $150 (Revised annually or
as needed: No charge for revision issued within 3 months
of purchase)
Fr i ed m a n o n C o n tra c ts a n d C o n ve y an c e s
o f R e a l P ro p e rt y, S e v e n t h E d i t i o n
M i l t o n R . F r i e d m a n (deceased; former
Partner, Parker, Duryee, Zunino, Malone, and
Carter, New York City) and J a m e s C h a r l e s
S m i t h (John Byrd Martin Professor of Law,
University of Georgia)
Packed with significant new coverage of
contracts, conveyances, and title insurance, the
expanded Seventh Edition of F r i e d m a n o n
C o nt r a c t s a n d C o n v e y an c e s o f Re a l
P ro p e rt y provides you with all the legal analysis
and technical guidance you need to negotiate,
draft, and finalize airtight contracts of sale.
2 looseleaf volumes, 1,560 pages, $350 (Revised annually:
No charge for revision issued within 3 months of purchase)
For more information on any treatise, including the Table of Contents, log on to www.pli.edu
All treatises require prepayment and can be returned within 30 days for a full refund.
Practising Law Institute ®
Negotiating the Sophisticated Real Estate Deal 2007
High Stakes Strategies in Challenging Times
NEW YORK CITY, APRIL 23-24, 2007
R e g i s t r a t i o n / H o t e l I n f o rm a t i o n :
N e w Yo r k C i ty S e m in a r L o c a ti o n : PLI New York Center, 810 Seventh Avenue at 53rd Street
(21st floor), New York, New York 10019. Message Center, program days only: (212) 824-5733.
N e w Yo r k C i t y H o t e l A c c o m mo d a t io n s : The New York Hilton & Towers, 1335 Avenue of the
Americas, New York, NY 10019. Reservations (877) NYC-HILT. Please mention you are booking
a room under the Practising Law Institute Corporate Rate and the Client File N# is 0495741.
You may also book reservations on line at www.hilton.com and enter the same Client File # in
the Corporate ID # field to access Practising Law Institute rates. Due to high demand and
limited inventory in New York City, we recommend reserving hotel rooms as early as possible.
P a y m e n t P o l i c y : Registration fees are due in advance. Attendees may pay by check, Visa,
MasterCard, American Express or Diners Club.
C a n c e ll a ti o n s : All cancellations received 3 business days prior to the program will be refunded
100%. If you do not cancel within the allotted time period, payment is due in full. You may
substitute another individual to attend the program at any time.
P L I ’s S c h o l a r s h i p / F i n a n c i a l H a rd s h i p P o l i c y : Full and partial scholarships to attend PLI
programs are available to judges, judicial law clerks, law professors, attorneys 65 or older, law
students, pro bono attorneys, librarians and paralegals who work for nonprofit organizations,
legal services organizations or government agencies, unemployed attorneys and others with
financial hardships. To apply, send your request on your employer’s letterhead, stating the
reason for your interest, along with the completed registration form on this brochure, to the PLI
Scholarship Committee. All applications must be accompanied by a $25 non-refundable
application fee (applicants may pay by check or credit card), and must be submitted four weeks
before the date of the program you wish to attend. Students must submit a copy of their
student ID card.
P L I Gro u p D i s c o u n t s : Groups of 4-14 from the same organization, all registering at the same
time, for a PLI program scheduled for presentation at the same site, are entitled to receive a
group discount. For further discount information, please contact [email protected] or call
(800) 260-4PLI.
E d u c a tio n C o u rs e C red it : States have widely varying regulations regarding Continuing
Education credit, therefore, please contact PLI for more information concerning approval.
N e w Yo rk St ate CL E C re d i t: In accordance with the requirements of the New York State
Continuing Legal Education Board, this non-transitional continuing legal education program is
NOT approved for the newly admitted attorney within the first two years of admission to the
Bar. It has been approved for experienced attorneys for a maximum of 15.0 credit hours, of
which 1.0 credit hour can be applied toward the ethics requirement and 14.0 credit hours can
be applied toward the professional practice requirement.
C a l if o r n ia M CL E Cred it : PLI is a State Bar of California approved MCLE provider. This activity
has been approved for MCLE credit in the amount of 12.5 hours, of which 1.0 hour will apply
to legal ethics. PLI will retain the required MCLE records for this program.
C o n t i n u in g P ro f e s s io n a l E d u c a ti o n C o u r s e C re d i t : Recommended CPE credit: 8.0 hours, in
which 2.0 hours will apply to Accounting, 0.5 hour will apply to Business Management and
Organization, 4.5 hours will apply to Finance, and 1.0 hour will apply to Specialized Knowledge
and Application. Course level: Intermediate. The Practising Law Institute is registered with the
National Association of State Boards of Accountancy (NASBA), as a sponsor of continuing
professional education on the National Registry of CPE Sponsors. State boards of accountancy
have final authority on the acceptance of individual courses for CPE credit. Complaints
regarding registered sponsors may be addressed to the National Registry of CPE Sponsors,
150 Fourth Avenue North, Suite 700, Nashville, TN 37219-2417. Web site: www.nasba.org
No prerequisites or advance preparation is required for CPE credit. Contact [email protected]
regarding complaints and refund policy.
C a l i fo r n i a P a ra l e g a l s : You can satisfy your new continuing legal education requirements by
attending PLI’s nationally acclaimed Institutes and Programs!
Il lin o i s C L E C re d i t : PLI is an accredited provider in Illinois. Attorneys seeking Illinois credits
must attend the entire program as the Illinois CLE Board will only award CLE credit for
attendance at an entire course or activity.
S P E C I A L N E ED S : If you have special needs as addressed by the Americans with Disabilities Act,
please notify Customer Relations at least two weeks prior to your program.
S p o n s o r s h i p / E x h i b i t O p p o rt u n i t i e s : Practising Law Institute, the leader in continuing legal
education for 70 years, draws top lawyers from major law firms and corporations to over 250
comprehensive programs annually. Don’t miss this chance to target decision-makers in specific
areas of the legal market with sponsorship opportunities from PLI. Sponsor a breakfast, coffee
break or luncheon at a PLI program for invaluable opportunities to network with industry
leaders. Or, set up an Exhibit of your product/service at a specific program with a display
and/or sales representative. Our staff will help you choose which option is right for you.
Please contact Karen Johnson at (212) 824-5746 or email [email protected] to make sure
you don’t miss out!
B a s i c U p k e e p S e rv i c e : In order to keep you abreast of the latest developments in your field,
the purchase of PLI treatises includes Basic Upkeep Service, so that supplements, replacement
pages and new editions may be shipped to you immediately upon publication for a 30-day
examination. This service is cancelable at any time.
P L I B o o k s t o re s : Current Publications, Training Materials, Audio/DVD and related products are
available for purchase at the PLI New York Center, 810 Seventh Avenue at 53rd Street (21st
floor), New York, NY, and at the PLI California Center, 685 Market Street, San Francisco, CA,
Monday to Friday, 10:00 a.m. - 4:00 p.m. All PLI Publications can also be purchased online at
www.pli.edu
E ma il : i n fo @ p li. e d u • Vi s i t U s O n T h e We b : w w w. p l i . e d u
R E G I S T R AT I O N / O R D E R F O R M
WEB:
w w w. p l i . e d u
PHONE:
( 80 0) 2 60 - 4 PLI
Monday - Friday
9 a.m. - 6 p.m.,
Eastern Time
FAX:
( 80 0) 32 1- 0 09 3
Open 24 Hours!
MAIL:
Prac tising L aw
In stitute
810 Seventh Avenue
New York, NY 10019
Fax or mail the completed
Registration /Order Form below.
W h e n R e g i s t e r i n g , P l e a s e R e f e r t o P r i o r i t y C o d e : AT U 7
Make necessary corrections on mailing address.
m Please check if you are a PLI Privileged Member.
m Please send me information on PLI membership.
m Please send me PLI’s catalog of publications.
m Please send me PLI’s catalog of Institutes and
Programs.
YES, please register me for the following session:
Negotiating the Sophisticated Real Estate Deal 2007
m
m
m
m
Four Easy Ways
To Register
10770 N e w Yo r k C i t y S e m i n a r,* April 23-24, 2007, PLI New York Center, $1,395
10774 Course Handbook only, $179
584 Holtzschue on Real Estate Contracts, 2nd Ed.,1 1 looseleaf volume, $150
8124 Friedman on Contracts and Conveyances of Real Property, 7th Ed.,1 2 looseleaf volumes, $350
m My Email address is:_____________________________________________________________ Please send me Email updates.
*Includes Course Handbook.
1
All treatises require prepayment and can be returned within 30 days for a full refund.
The information below is required to properly process your CLE certificate:
State: _____ Bar ID# ____________ State: ______ Bar ID# ___________ State: ______ Bar ID# ____________
FREE Shipping and Handling on all Audio/DVD and Treatise
purchases. PLI will absorb shipping and handling charges on
all prepaid Course Handbook orders in the United States,
U.S. Possessions and Canada.
California, Illinois, Maryland, New York, Ohio, Rhode Island,
Texas and Virginia residents please add applicable sales tax
to price of publications and audio and DVD products.
PR I O R IT Y C O D E : ATU7 8A500
$ ___________check enclosed (Payable to Practising Law Institute) m Bill me m PLI Privileged Member
Please Charge to: m Visa m MasterCard m American Express m Diners Club
Credit Card No.:________________________________ Exp. Date:____ Signature Required: ________________________ Phone No.:_________________
PLI NEWS
ISSN 0479-0219
Practising Law Institute
810 Seventh Avenue
New York, N.Y. 10019
E TO:
E ROUT
PLEAS
P e r i o d i c a l s P o s t a g e P a i d a t N e w Yo rk , N. Y.
a n d a t a d d i t i o n a l m a i l i n g o ff i c e s
Name ________________________________________________________________________________________
Title _________________________________________________________________________________________
Firm _________________________________________________________________________________________
Address ______________________________________________________________________________________
(Use Street Address for UPS Delivery)
City/State/Zip _________________________________________________________________________________
Phone __________________________ Fax ________________________ Email _________________________
Satisfy Your CLE Requirements!
news
®
Practising Law Institute ®
Vol. 44, No. 40, April 2, 2007
Negotiating
the Sophisticated
Real Estate Deal 2007
High Stakes Strategies
in Challenging Times
• NEW! P re e m p t i v e b i d s : A l a w y e r ’s n i g h t m a re o r d re a m ?
• UPDATES!
- T he b est te ch niqu es fo r neg otiatin g und er
c u rr e n t m a r k e t c o n d i t i o n s
- R E I Ts , i n c l u d i n g R E I Ts a s p u rc h a s e r s — O p e r a t i n g
P a rt n e r s h i p U n i t s a s c u rr e n c y
- W h i c h re p re s e n t a t i o n s a n d w a r r a n t i e s d o y o u
re a l l y n e e d ?
- J o i n t Ve n t u re s : C ri ti c a l a re a s t o a d d re s s , a n d re m e d i e s
a n d re s p o n s e s f o r w h e n t h e y f a i l
• D u e d i l i g e n c e a n d c o n t r a c t i s s u e s f o r p u rc h a s e r a n d
s eller
• Ho w to be tte r util iz e the title in su ranc e co mpa ny in
complex transactions
• E a r n a f u l l h o u r o f e t h i c s c re d i t f o r y o u r
C L E re q u i re m e n t s !
… and much, much more. Look inside!
NEW YORK CITY, APRIL 23-24, 2007
R e g i s t e r O n l i n e a t w w w. p l i . e d u o r C a l l ( 8 0 0 ) 2 6 0 - 4 P L I