in-Common
March 2013
Inside This Issue:
President’s Message
page 2
Conference 2013
No Re-Treads Here
When It Comes to Getting the Job Done Right
Expanding Knowledge: Pursuing
Excellence
page 4
Legal Corner
Developments In Real
Estate Law
page 6
Member Profile:
Discount Tire Company
No Re-Treads Here When
It Comes to Getting the
Job Done Right
page 7
Thinking Out Loud
page 8
Office Lease
Administration
page 9
NRTA Officer to Retirepage 10
NRTA Scholarships
page 12
Understanding the Special
Receiver and Receivership
Process
page 13
CE
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2013
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NRTA’s 18th Annual Conference
September 22-25, 2013
Renaissance Orlando Hotel
at SeaWorld
Front Row - Christine Cimellaro, Sharon Weber,
Joan Robinson, Toni Jones, Coleta Hodgson
Back Row- John Bachler, Helen Richie, Amelia Witt, Jagroop Legha
®
President’s Message
Happenings
NRTA
Your Board of
Governors recently
met at the Renaissance
Orlando Hotel at SeaWorld. This is the site
of NRTA’s upcoming
Moe Laliberte Annual Conference in
September. We welcomed back newly re-elected members
Sue Harrod of KFC Corporation and
George Elefther from Bed Bath and Beyond, along with newly elected member
Pam Myers of Dick’s Sporting Goods.
Each of these members will serve on the
Board of Governors for a three-year term.
Also attending this multi-day planning
session were members of our Conference
Planning and Curriculum Committees.
Joining the Curriculum group for the first
time are Ingrid Kushinsky of Clarks
Companies, NA and Steven Doben of
Fresenius Medical Group, LLC (see
sidebar on page 3 for a full list of committee members). Comprising our conference
planning committee are George Elefther,
Carole Fiola, Mary Ellen Belanger,
Cathy Estey, Sue Rebelo and Dave
Prior.
I would like to express a heartfelt
thanks to each of these people for their
selfless dedication, spirit of volunteerism,
and contributions to the NRTA over the
past number of years. Their willingness to
take time away from family and personal
commitments is nothing short of inspir-
Tenants
in-Common®
Published by:
National Retail Tenants Association, Inc.®
60 Shaker Road, East Longmeadow, MA 01028
[email protected]
Lisa Krizek, Editor
Copyright © 1999 National Retail Tenants Association, Inc.
No part of this publication may be used commercially or reproduced
in any form without prior written permission of the publisher.
Some members of the Curriculum
Committee during the 2013 planning
session in Orlando, FL
ing. Their eagerness to work together
and collaborate as a team on behalf of
our profession has been most effective
as we prepare for the 18th Annual NRTA
Conference.
The Board reinforced key operating
priorities that will guide the activities and
efforts of our association through 2013.
They are:
• Continue to encourage companies to
consider NRTA membership,
• Continue to grow member benefits,
and
• Strengthen the educational culture of
the Association.
While the NRTA represents a healthy
cross-section of retailers, we also recognize there is an opportunity to reach out to
still more retailers who have yet to experience our conference and membership.
Additionally, your association is committed to continue membership benefits
through upcoming webinars, our interactive website, a member-family scholarship
program, and social networking.
We are mindful that our core mission
is as a resource for professional education. The NRTA is the premier resource
for the education and training within our
community. Encouraged by the success
of a pilot program for commercial office
tenants which we introduced at last year’s
conference, we’ve turned up the burners
on this new education initiative. Spurred
on by very positive feedback, the Curriculum committee has expanded its efforts
and will host additional new courses
within this office tenant segment.
As it did nearly 18 years ago, NRTA
is once again stepping forward to fill the
void for quality education which ultimately leads to the development of best
practices, improved performance on the
part of the commercial office lease administrators, and improved cost savings for
their companies.
Speaking of education, I am very
pleased that NRTA leadership has once
again voted to sponsor a scholarship
program for member families. Ten (10)
$1,000 scholarships are to be offered
to recipients. Please see page 12 of this
newsletter or visit the website to learn
continued on page 3
N EW N RTA MEMBERS
Welcome New NRTA Companies
Regular Members
Aaron’s, Inc.
Belk, Inc.
Benchmark Rehab Partners
Charles Schwab
Deckers Retail, LLC
Kathmandu
Taco Bell
Affiliate Members
CTMI
Lease Management Group, LLC
Smith, Robertson, Elliott & Douglas, LLP
For membership information go to retailtenants.org or call the NRTA office 413-525-4565
2
President’s Message
continued from page 2
more about the scholarship program and
how applicants can submit their materials.
I encourage you to take advantage of this
valuable member benefit.
Breaking news:
At press time, I am delighted to receive
news that a leading retailer, Walmart, has
stepped forward as a conference sponsor.
This is the first time a retail organization
has joined our team as a sponsor. I’m impressed that such an industry leader has
taken the time and resources to express
its encouragement for NRTA’s education
programs in this fashion, which not only
benefits Walmart employees but also our
entire profession.
I’m excited about the year ahead. As
we continue to seek higher performance
standards in a challenged economy, our
core curriculum and organization leaders
left Orlando recharged about the mission
and purpose of our association.
Curriculum Committee Members
Co-Chairs
Lisa Krizek–Ascena Retail Group, Inc.
Betsy Long–Chico’s FAS, Inc.
Ted Pajda–Enterprise Holdings, Inc.
Lease Administration Track
Ingrid Kushinsky–Clarks Companies, NA
Dolores Lublanezki–Ascena Retail Group, Inc.
Roxanne Sicard–CVS Caremark
Legal Track
Gregg Ankenman–Wendel, Rosen, Black &
Dean, LLP
Glenn Inanaga–Panda Restaurant Group, Inc.
Jennifer Romano–Crowell & Moring LLP
Occupancy Cost Track
Debbie Ravel–GAP, Inc.
Rosanna Rizik–Lease Management Group, LLC
Joan Roth–Roth & Associates Consulting
3
Office Track
Rick Burke–Lease Administration Solutions
Steve Doben–Fresenius Medical Group, LLC
Real Estate Track
Mez Birdie–NAI Global
Caleb Smith–Dollar General Corporation
Sonya Webster–Walmart Realty
Don Yost–Foot Locker Realty, Inc.
Professional Development Track
Sue Harrod–KFC Corporation
Paul Kinney–NRTA
Class Scheduling/Monitors
Mary Fraser–Lease Administration Solutions
Annual Conference
NRTA will host its 18th Annual
Expanding Knowledge Conference on
September 22-25, 2013 at the Renaissance Orlando Hotel at SeaWorld. This
year’s three-day program has adopted
Pursuing Excellence as its theme.
Curriculum coordinators said the
program will offer 52 course presentations coupled with 17 related small-group
discussions. Presentations will focus on
six major education tracks: Office, Lease
Administration, Occupancy Cost, Real
Estate, Legal and Professional Development. A full list of courses will be available on the NRTA website in early May.
New Courses Featured
Several new courses will be added this
year including:
CAM Workshop, Parts I & II: for tenants
larger than 15,000 sq. ft.
CAM Workshop, Parts I & II: for tenants
less than 15,000 sq. ft.
Overview of Canadian Real Estate
Site Plan Workshop
Preparing for a Deposition
Technology for Office Tenants
Developing an Office Lease Admin. Dept.
Utilizing In-house and Outsourcing
Getting To the Next Level–How Can You
Help the Succession Plan?
Non-traditional and Street Front Leasing
The Cost of Construction Allowance
Collection
LL
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CE
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2013
e
v
a
S the
!
e
t
Da
NRTA’s 18th
ANNUAL CONFERENCE
September 22-25, 2013
Renaissance Orlando Hotel
at SeaWorld
Conference Registration Rates
Early Bird As of 6/24/2013
As of 8/26/2013
MemberNon-Member
$725.00$950.00
$825.00$1,050.00
$875.00$1,100.00
Trade Show Exhibitor Rates
Early Bird
As of 6/24/2013
As of 8/26/2013
MemberNon-member
$2,400.00
$2,900.00
$2,900.00
$3,200.00
$3,400.00
$3,700.00
There is no more effective way to drive
dollars from the occupancy cost side of
the ledger to the bottom line than a wellinformed lease administration function.
Attendees study and evaluate best
practices that are necessary in order to
improve lease administration efficiencies
and profitability. Valuable networking
sessions provide a great opportunity for
practitioners to interact with professionals
with similar challenges, and to benchmark
their processes against the best in the
industry.
Emphasizing the practical return on
investment retailers and office tenants
achieve through the Annual Conference,
NRTA Executive Director Paul Kinney
said, “Each year we hear from real estate
4
managers that lessons learned at the
conference pay dividends and improve
cost efficiencies.” He explained, “When
an audit turns up $100,000 in recoverable
expenses, it has a way of opening eyes
and getting management’s attention.”
Curriculum co-chair Betsy Long, Esq.
of Chico’s, emphasized that course presenters are hand-picked from within the
industry. Their proven experience and eagerness to share professional information
is the backbone of the NRTA experience.
She added, “As many attendees attest, this
three-day experience can change the way
you do business.”
continued on page 5
Conference 2013
Conference Sponsorships
continued from page 4
Conference planners encourage participants to sign up early and take advantage
of early bird rate discounts. They also
report that conference registration rates
were held to last year’s levels. Betsy
noted, “This (conference) is a very affordable learning experience with impressive
Conference
Bags
returns on investments.”
Cathy Estey, NRTA’s Trade Show cocoordinator, announced that exhibitors for
the trade show can also take advantage of
discounts being offered for early exhibitor
registration.
Brochure
and CD
Sunday Night
Reception
Getting Management’s Approval
Here are some suggestions:
Pocket Guide
• Prepare your intended schedule for review with your supervisor.
• Be prepared to explain how these education sessions will be valuable to your
responsibility.
• Review your department challenges, discuss the specific NRTA sessions that will
help you to better meet these challenges.
• Provide a list of resource companies that will be exhibiting at the NRTA trade show,
and indicate how discussions with them might be helpful to your function.
• Include the cost of registration, airfare, ground transportation, meals and lodging.
• Plan an information-sharing/training session with your team members, to be
implemented upon your return.
5
Realty
Monday Night
Reception
Three
Conference
Breaks
Legal Corner
Developments in Real Estate
By Andrew N. Jacobson, Esq.; Maslon Edelman Borman & Brand, LLP [email protected] and
Rebekah Fisher, Esq.; Waller Lansden Dortch & Davis, LLP [email protected]
Editor’s Note: Legal Corner contains case
summaries and analysis of recent court decisions that impact retail leasing and lease
administration. These summaries focus on
the leasing issues covered in each case
and do not include detailed discussions or
analysis of the procedural and peripheral
issues in the cases.
ACCEPTANCE OF RENT CONTINUES
THE LEASE
C&K Market, Inc. v. Giorgio Roccasalva,
246 Ore. App. 277; 265 P 3d 81 (2011)
In 2006, C&K Market, Landlord, and
Giorgio Roccasalva, Tenant, entered
into a lease where Tenant leased space
for the operation of a liquor store inside
Landlord’s grocery store. The lease
required Tenant to pay base rent for the
space along with a separate payment for
equipment rent to reimburse Landlord
for the costs of installing the equipment
and fixtures for the liquor store’s use.
The lease provided that if Tenant fails to
remedy within 10 days of receiving notice
from Landlord any default in paying its
monthly rent obligations, then the Landlord has the right to terminate the lease
and pursue the appropriate remedies for
Tenant’s breach. In October 2007, Landlord realized that despite being timely
on its payments of base rent, Tenant had
not paid any equipment rent during its
tenancy. Landlord began to invoice Tenant for the past due equipment rent but
Tenant continued to only pay base rent.
In November 2009 Landlord sent Tenant
a letter stating that it would terminate the
lease on December 1 if the Tenant did not
pay all past due equipment rent. Tenant continued to operate the liquor store
paying only base rent in December 2009
and January 2010 and Landlord accepted
these payments. Landlord filed a forcible
entry and detainer action on January 26,
2012 to eject the Tenant from the premises. The Tenant claimed that by accepting
the rent payments, Landlord had waived
its right to terminate the lease and was
therefore not entitled to possession of
the premises. The court ruled that “once
a landlord becomes aware of the breach
of the lease and accepts rent thereafter,
it is an election to proceed with the lease
in spite of the breach.” Further, “when a
landlord learns that a tenant has breached
the lease in such a way that provides the
landlord with a basis to terminate the
lease, the landlord must not accept performance of the lease obligations by the tenant if the landlord wishes to terminate.”
Landlord’s acceptance of the base rent
payments was legally incompatible with
its purported termination of the lease in
December 2009. Acceptance of the base
rent constituted an election to continue
the lease notwithstanding the Tenant’s
continued breach of its obligation to pay
equipment rent.
CANNOT INFER CO-TENANCY; LEASE
DOES NOT SUPERSEDE REA
University Mall Shopping Center, L.C. vs.
Macy’s West Stores, Inc. No. 2:10-CV-1159
TS, 2012 U.S. Dist. LEXIS 42044 (C.D. Utah,
2012)
University Mall, Landlord, sued Macy’s,
Tenant, for failing to pay rent in accordance with the lease. Tenant argued that
its requirement to pay rent was abated
based on the closure of the Mervyn’s
store at the mall. Additionally, Tenant
made a counterclaim that the Landlord
had further breached agreements between the parties by failing to maintain
a proper mixture and balance of tenants
at the mall and failing to obtain Tenant’s
written approval prior to expanding the
mall as required under the Construction,
Operational and Reciprocal Easement
Agreement (“REA”). Landlord moved
for summary judgment on its claims for
Tenant’s breach of the lease and dismissal
of Tenant’s counterclaims. The lease
between the parties provided that “if
Nordstrom or another full-line department
store is not committed to operate at University Mall, then the rent payments set
forth in this paragraph shall be abated…”
Nordstrom began operating its store at the
mall in March 2002. Mervyn’s, who had
operated at the mall since 1981, closed in
December 2008. Tenant stopped paying
rent on September 1, 2010. The court
ruled in favor of the Landlord with respect
to its claim that the Tenant was in default
for failing to pay rent finding that the Tenant’s rent should only abate if Nordstrom
or another full-line department store is
continued on page 11
6
NRTA Member Profile
No Re-Treads Here
When It Comes to Getting the Job Done Right
Sharon Weber
Real Estate Dept. Manager,
Discount Tire Company
Keeping pace with an impressive growing real estate portfolio keeps NRTA
member Sharon Weber very busy. As
Real Estate Dept. Manager for Discount
Tire, Sharon is a self-proclaimed advocate for the NRTA’s education programs.
For the past ten years she has turned
to the NRTA for access to better ideas
and sharing of information with people
doing similar tasks. She says, “I love the
fact that I can pick up the phone and chat
about an issue or question with someone I
met through NRTA.”
Her enthusiasm for NRTA is shared
with other members of the company’s
real estate management team, who are
responsible for more than 850 real estate
locations including stores, offices &
warehouses.
Key Challenge for Real Estate
Management Team
Discount Tire currently operates in 25
states and is expanding at a rate of approximately 40 stores annually. Sharon said this growth commitment now
includes a new marketing campaign
involving site development into five midwestern states of Iowa, Missouri, Kansas,
Nebraska and North Dakota. Sharon
added, “Needless to say, we’re always
looking for good potential sites that can
handle our typical facility of 7,000 square
feet.”
Much of Discount Tire’s real estate
team is also busy implementing a new
real estate software system, Tririga. They
are impressed with how much work is
required to make this a success, includ-
ing a lease abstracting project and data
validation process for the company’s
property portfolio. Sharon said, “Clearly,
anyone who has experienced such a project understands software implementation
is a big undertaking. It’s critical that all
information is entered in the system correctly, therefore, we are investing a lot of
time upfront to establish the foundation
in order to utilize the system to its fullest
capabilities now and into the future.”
NRTA: When did you first encounter
NRTA?
SW: “Ten years ago, a real estate associate had mentioned an NRTA education
session and encouraged me to learn more.
I soon found myself in San Francisco attending the NRTA education conference.
Since then, we try to send a few people
each year to the Annual Conference.
Personally, the networking opportunity experienced at the conference is my
major benefit along with the educational
value. It’s enlightening to sit and talk
with people doing the same work, facing
the same issues and practices.”
NRTA: How many team members do
you have?
SW: The company has a team of nine
people integrated within real estate, lease
accounting and lease administration coordination. The team works closely with
two in-house attorneys and paralegals
for site acquisition responsibilities, and a
construction management team of ten.
About Discount Tire
With more than 850 retail stores in
25 states, Discount Tire, also known as
America’s Tire in parts of California,
Oregon & Washington, has grown to
become the world’s largest independent
tire and wheel retailer today. This NRTA
member company was founded in 1960
by Bruce T. Halle in Ann Arbor, MI.
With its corporate headquarters located
7
in Scottsdale, Arizona, Discount Tire is
known for low prices, excellent selections, and highly trained employees who
are dedicated to customer satisfaction.
Discount Tire received the “Most
Admired Company” Award voted by its
peers in Arizona and consistently ranks
#1 in revenue according to Arizona
Corporate Excellence 100 for privately
held companies. Both Tire Business
and Modern Tire Dealer have ranked
Discount Tire as the #1 independent tire
retailer based on number of retail outlets
and annual revenues.
In order to fulfill the needs of consumers who do not have access to one of its
stores, Discount Tire has a mail order/online department known as Discount Tire
Direct. (www.discounttiredirect.com).
With distribution centers in Arizona, Ohio
and Texas, Discount Tire Direct helps
to ensure that its products are delivered
quickly.
Pursuing Excellence
Thinking Out Loud:
conference theme is on-target
by Paul Kinney, NRTA Executive Director
NRTA’s 18th Annual Conference,
Expanding Knowledge, has adopted the
theme Pursuing Excellence. I love the
concept. It speaks so directly about the
fundamental purpose of the conference,
which is to bring the best minds of lease
administration practitioners together so
they might seek to not only improve their
own performance standards, but also raise
the professional standards of the lease
administration industry.
Having just spent three days with members of the NRTA Curriculum Committee
as they planned the education program,
I was constantly aware of the pursuit of
excellence demonstrated by this group
of people. Their selfless dedication gave
me the opportunity to really consider this
theme of excellence.
Excellence is something that while none
of us really master, we should be striving
for. It is a pursuit that, by its very nature,
helps to improve our performance. This is
why the theme “Pursuing Excellence” is
so right for NRTA’s 18th Annual Conference.
As the premier education resource for
lease administration professionals, the
NRTA has always represented an attitude
that encourages us to seek a better solution
or practice rather than accept the status
quo. Thankfully, there are people out there
who are willing to go through the work
of achieving excellence. The fact is, it’s
not something that we can just achieve by
sheer desire alone. In order to adopt an
attitude of excellence, we must do more
than simply hope or talk about it. Whether
you apply this pursuit to an athlete, a student, or perhaps a businessperson such as
yourself, there is a journey that person has
accepted in order to reach excellence.
The story of a successful person or company also includes difficult and challenging choices that were made. Those
who achieve excellence had to make some
tough decisions. They had to work harder
and put in the training to learn the fundamentals of their craft. They built a foundation by mastering the basic principles of
their field of endeavor.
The pursuit of excellence requires that
you adopt the attitude that being “OK” is
not for you. Second best will not satisfy
you. As one person put it, “Good enough
is never good enough.” I am convinced
that this attitude is contagious. It feeds
those who are willing to work, put in the
time, think hard and genuinely desire to
improve their performance.
This all brings me back to the NRTA
Annual Conference that will be held in
Orlando, FL this September 2013. This is
where 500 lease administration and real
estate professionals, much like you, will
come together to renew their commitment
to excellence. For some, their journey
toward excellence will begin at the conference. For others, the conference will be
a time to renew their commitment to this
goal. For those willing to study and
8
evaluate best practices, the pursuit of
excellence begins here.
The conference is a platform on which
attendees are surrounded by other professionals seeking a common goal. They pick
each others brains. For three-and-a-half
days, a lot of smart people thinking about
similar things come together and create a
championship mentality.
The pursuit of excellence comes alive at
the conference. You have the selection of
courses presented by your peers, directly
dealing with your challenges. Additionally, small interactive discussion groups
provide an incredible networking forum
between you and others with similar
professional responsibilities. Expect to be
challenged; expect to stretch yourselves.
It’s an exciting journey. Whether you’re
at the beginning of your career or a veteran in the field, you’re invited. Join us in
the climb toward excellence. Gain knowledge, experience and improved capabilities. We’ll see you at the top in September.
NRTA
:
s
r
e
f
Of
For 17 years the NRTA has
offered classes relating to retail lease
administration and has been a leader in
best practices and solutions to improve
cost recovery results relating to common
area maintenance expenses and overall
occupancy cost. Throughout, the NRTA
has been essential in defining the role of
the lease administrator and raising the
bar of the commercial tenant industry
as a whole. The NRTA has announced
that the same excellence is now being
offered to office and industrial tenants
who are looking for training in lease
administration, operating expense review
and lease auditing.
Many office tenants oversee
their real estate portfolios very
informally without a designated
lease administration department
or a trained person to review
landlord billings. In fact, they
often just pay what is billed by
the landlord without any review,
basically throwing money away.
So often we get comments
from office tenants like, “Should
I be asking my landlord for
all the invoices to verify our
operating cost?” or “We want
to start a lease administration
department; who do we hire
and how do we train them?”
The NRTA provides the best
opportunity for tenants to get
hands on training and answers to
these types of questions.
In today’s commercial tenant
environment, an office tenant
with multiple office locations
must put a process into place
to safeguard critical lease
information and review all
Office Tenants
Office Lease Administration Classes
by Rick Burke; Lease Administration Solutions, LLC
www.LeaseAdminSolutions.com
landlord billings for overcharges. It is
essential for larger portfolio tenants to
have a lease administration software
system, so information is readily available
such as rent amounts, option notices, and
operating expense exclusions. A single
mistake in any one of these areas can be
very costly to the tenant, often without
them ever knowing it.
For example, during a recent audit
performed for an office tenant it was
discovered that a landlord was overbilling
for parking garage expenses that were not
included per the lease. The tenant was
paying on a per space basis outside of the
lease as well as paying for all the cost of
the parking garage through the operating
expenses. The dollar for dollar savings to
9
the tenant was $150,000.
In another recent audit that was
performed on the base year expenses
compared with the current year expenses,
identified many accounts that were not
in the base year that were being billed in
the current year. The landlord included
management and other salary accounts
that were not in the base year, thus
overstating the current year expenses
in comparison to the base year. This
allowed the tenant to reduce the current
year operating expense as well as recover
amounts for the three prior years of
operating expenses totaling $220,000.
A common expense that is an
overcharge to the tenant is real estate
taxes. Much like the review of taxes in
retail audits, office and industrial
tenants find themselves paying
for real estate tax parcels that are
not defined as part of the building
or property. The parcel could
include a building or land that the
landlord owns next to the office
building, or perhaps it could be
for undeveloped land that the
landlord has slated to build on in
the future, or an abated assessed
value that did not get passed
through to the tenant. These types
of overcharges are not uncommon
and if identified, will reduce the
tenant current and future operating
cost.
We also see large overcharges
to tenants when calculating
the “gross-up” lease clause.
The gross-up is the method of
increasing operating expenses
for a non-fully occupied building
to represent a fully occupied
building. How the “gross-up”
is applied to fixed and variable
expense accounts and how it is
applied to the base year could
continued on page 10
Office Lease Administration Classes
continued from page 9
result in a significant overcharge to
the tenant. Other areas where landlord
overcharges loom are in management
fees, overtime HVAC, pro-rata share
allocation and capital expenses. Unless
the reviewer is trained to understand these
issues, the over billed amounts can go on
undetected.
This year’s NRTA Annual Conference
is at the Renaissance Hotel at SeaWorld
in Orlando, FL. Its education program
features 52 lease administration classes
and 17 small group discussions in which
practitioners are able to meet with people
having similar challenges.
Classroom presentations are organized
into six tracks: Lease Administration,
Occupancy Cost, Office Leases,
Real Estate, Legal, and Professional
Development.
Office tenant courses cover topics such as:
• Understanding Operating Expenses
• Reviewing and Auditing Operating
Expenses
• Negotiating an Office Lease
• Understanding Mixed Use Costs
• Global Issues in Lease Administration
Office tenants explore best
practices designed to safeguard
lease information, be more
efficient, and save their company
money.
Companies such as Lease
Administration Solutions, Cresa
Partners, Cassidy Turley and
Fresenius Medical Care are
among the presenters for the
office classes.
NRTA Officer to Retire
Longtime NRTA member Dave Prior
announced his retirement as Senior
Manager of Lease Audit and Collection
for CVS Caremark. A 30-year veteran,
Dave’s responsibility included overseeing the Occupancy Expense Audit
Program for the company’s 7,000 retail
locations and another 500 corporate
sublease locations. He will retire in
April.
Dave has served in a number of leadership positions with the NRTA. He is a
member of the Conference Committee
and past chair of the Trade Show Committee. A former member of the Board
of Governors, Dave is currently serving
as the organization’s Treasurer.
NRTA co-founder and president
Moe Laliberte praised Dave for helping
NRTA grow to become a center for
professional education and integrity.
He said, “Dave is one of the early members who understood why NRTA was so
needed within the industry and after our
first meeting in Boston, asked what he
could do to help us. His passion for the
NRTA continues today.”
10
For more information on the conference
and membership, please see NRTA’s
website www.retailtenants.org.
Developments in Real Estate
continued from page 6
not “committed” to operate at the mall.
Center.” The court ruled that the lease did
agreements between the Landlord and
The court looked at the plain meaning
not supersede the REA. “One contract
the various department stores concernof the word “committed” which means
will not superseded another unless it is
ing the development, maintenance,
to “pledge or bind” and ruled that the
plainly shown that such was the intent
improvement and operation of the mall
obligation of the Tenant to pay rent was
of the parties; and this is usually where
so the agreements must be construed as
“premised on Nordstrom or another fullthe later contract fully covers the earlier
a whole with their meanings harmonized
line department store pledging to manage
one.” The REA and the lease were broad
where possible. The lease was simply an
and run a store at the mall”. At
agreement between Landlord and
the time the lease was signed,
Tenant with neither party expressMervyn’s was already operating
ing the notion that the intent was to
a store and therefore could not
supersede the REA. Tenant argued
“pledge to operate” a store. Had
that the REA required Landlord to
Tenant wanted the continued
obtain the written consent of Tenoperation of an anchor store as a
ant for “any future structural addicondition to paying rent under the
tions to the Enclosed Mall or to the
lease, Tenant should have made
Shopping Center” and for “future
that part of the plain language
expansion for Developer Mall store
of the lease by adding specific
floor area”. Landlord argued that
language to the lease that rent
the signed lease between the parties
was contingent on the continued
contained the language necessary
operation of Mervyn’s.
to evidence the written approval
As to the Tenant’s counterof the Tenant as required under
claims that the Landlord had
the REA. The Lease provided that
breached the Lease and REA
“Tenant hereby acknowledges that
by failing to maintain a proper
STILL WAITING ON YOUR Landlord will be expanding the
mixture and balance of tenants
Air Conditioned Mall…” In addiat the mall and failing to obtain
tion, the lease stated that Landlord
Tenant’s written approval prior
reserves the right “to construct
to expanding the mall, the court
additional buildings or additions
remanded the case to the lower
on existing buildings or other
court for trial denying the Landimprovements in the Shopping
We provide Center.” The court ruled that “aclord’s motion to dismiss. Landlord argued that lease language
on-time results knowledgement” is different than
superseded language contained
permission. The plain language of
and
savings.
in the REA. The REA provided
the lease only provides that Tenthat the Landlord must “use its
ant acknowledged the additional
best efforts to…have at all times
construction and the reservation of
Visit us online
a proper mixture and balance of
Landlord’s rights not that Tenant
for a special
occupants.” The Lease provided
gave permission for the changes.
that “Landlord reserves the abintro offer!
solute right to effect such other
tenancies in the Shopping Center
as Landlord, in the exercise
(917) 463-3929
of its sole business judgment
www.eximiusbpo.com
shall determine to best promote
the interests of the Shopping
Lease Abstracting &
Data Validation?
11
Scholarship Program
Member Benefit:
Scholarship Program Continues
The NRTA is continuing its member-family scholarship
program for 2013. The program will offer up to ten (10)
$1,000 scholarships to students who are children of NRTA
members.
The program was first introduced in 2007 to recognize
member support of NRTA’s education mission. Co-founder
Paul Kinney explained, “This is a perfect fit and expression
of our commitment to both our members and education
objective.”
NRTA contracts with the independent education counseling
resource College Counseling Services to process, evaluate and
determine all award determinations. Kinney said it is important for members to know this is an independent review made
by our outside resource. All active members are encouraged
to take advantage of this important member benefit. Only one
scholarship can be awarded to a member family per year.
Application forms and support information are available
on the NRTA website.
Twelve tips for
applying to college
1. Pay attention to deadlines
2. Carefully read the instructions
3. Provide all of the requested
information
4. Be sure to proofread everything
5. Be honest
Scholarship Criteria
6. Choose your recommendations wisely
• GPA transcript from current high school or college
7. Make your essay represent who
you are
• Acceptance letter from a 2-or 4-year accredited college,
trade or vocational school
8. Request copies of your high school
transcripts
• 500 word personal statement highlighting past accomplishments from school, church or community activity.
Included should be future goals and aspirations.
9. Keep copies of everything
• Submission of a formal application
10. Confirm that your application materials arrived
11. Study hard to get good SAT and/or ACT grades
12. Apply for financial aid within the timelines
All applications and accompanying materials must
be postmarked and mailed by Friday, July 5, 2013.
College Counseling Services & Tutoring Center has more
than 30 years of experience in helping students prepare for
higher education, Joan Tompkins, PhD. works with students
from many areas within the United States, helping with
career choices, college searches, application completion,
test preparation, and financial aid advice. Visit her website
at www.ccs-tutoring.com
12
Receivership
Understanding
The Special Servicer and Receivership Process
by Mez Birdie, CPM; NAI Global
While the “great recession” is over
and economy in general is rebounding,
commercial real estate loans placed at
the height of the market in 2005-2007
with high loan to value (LTV) ratios
are not producing enough cash to make
mortgage payments. Thus many landlords have defaulted on the mortgage
and lenders have started the foreclosure
process.
If a landlord does not contest foreclosure and gives the lender “deed in lieu
of foreclosure” (gives property back to
lender and loses equity), the lender may
appoint a “Special Servicer” to handle
the foreclosure. On the other hand, if the
landlord does contest the foreclosure via
litigation, the lender will ask the local
County Court to appoint a Receiver with
management, leasing and sale powers.
The Receiver is appointed by the
court as fiduciary for all parties (lender,
borrower/landlord and creditors) and is
charged with the responsibility to operate in the best interest of the property
and not individual parties. The Receiver
reports to court only and acts like the
property owner. The Receiver executes
the lease, evictions, and agreements
which are binding to the property until
a new property ownership after foreclosure is complete. The receiver is expected to file a monthly operations, leasing
and financial report with the court, thus
ensuring that the court order governs
Receiver powers.
A typical Receiver’s duties and authorities include items such as;
• Assume control of the property and
collect all rents/income
• Hire or discharge employees or
independent contractors without
liabilities to property or parties
• Maintain a separate bank account
with a federally insured banking institution in the name of the Receiver
• Approve and pay all property related expenses in a timely manner
• Adequately insure property for loss
and all liabilities
• Prepare and file tax returns related
to property only and not for Plaintiff
or Defendant
• Sell the property with Plaintiff’s and
Court approval
Special Servicers or Receivers will
mostly engage a property management
and leasing firm to manage and lease
the property. As the tenant, you will be
notified about the management/leasing
firm and address to send your rent and
notices. Since most court documents are
public knowledge, you can ask the property manager for a copy of the Receivership court order.
Many properties are in distressed condition with deferred maintenance prior
to a Special Servicer or Receiver taking
over. Additionally, the landlord is probably not communicating with tenants
on property management and leasing
issues. Thus you should promptly notify
the property manager (copy Receiver
or Special Servicer) in writing of any
and all pending issues regarding your
tenancy. Your lease is in full force and
effect during this period so ensure that
your lease is not in default. If landlord
is in default of lease terms and you are
13
seeking “self-help”, notify the property
manager and Receiver per lease terms.
If the property is not producing sufficient cash flow to handle operations
and tenant issues, typically the Receiver
will obtain funds from the lender to
resolve outstanding matters. It is in the
Receiver’s interest to resolve pending
property and tenant related matters as
soon as possible in order to facilitate the
foreclosure process.
The foreclosure process usually ends
with lender obtaining a “Summary
Judgment” against the landlord followed
by foreclosure sale after due public
notifications to all parties affected by
the foreclosure. After the foreclosure
sale, a Certificate of Title is issued and
the new owner (generally the lender)
becomes the new owner of the property.
Thereafter the Receiver is notified to
submit a final report and Receivership is
terminated. All tenants are given notice
with the contact information of the new
owner. The new owner may continue
property operations with the existing
management and leasing firm or appoint
a new company. Also the new owner
may or may not elect to sell the property
depending on its ownership goals.
Mez Birdie, CPM and attorney Mike
Paslay, Esq. will be speakers and further
discuss “Foreclosure and Receivership”
at NRTA’s Annual Conference in Orlando,
Sept. 22-25, 2013.