The Dirt Lawyer's Blog Archive

The protestations that it would not materially impact the industry notwithstanding, a lot of my friends and colleagues in the commercial real estate industry are breathing a sigh of relief.  Once again, provisions taxing so-called carried interest as ordinary income will not be passing Congress.  Well, at least that's what everyone is saying.  Remember, health care was dead too at some point and we all know what happened there. I understand the appeal of the law -- get those hedge funds! But it also goes after real estate with a vengeance.  Take your small to mid sized real estate developer who takes a risk by working on a brownfield or on a project in a marginal area or with IRRs that only work because of the nature of the investment.  So, those borderline deals go away, as to the leases, the sale, the construction jobs, the employment that comes with the finished real estate.  You get the picture.  What seems reasonable on the surface is a devil in the details. Or, as Robert Gree

An excellent commentary from PERE (reg. req'd) on the whole carried interest situation can be read here .  Like politicians do they call it the “The American Jobs and Closing Tax Loopholes Act of 2010.”  What a riot.   Now, I understand that experts are saying that this law will not impact a recovery (if indeed there actually is one going on).  After all partnerships are just one way of doing the deal (albeit the most common one) and there may be other tax efficient ways of doing so, but there is no denying that (a) returns will be lower, meaning (b) some people will not deploy as much money into dirt because the IRRs do not work, especially on the opportunistic side, and (c) some deals that "work" now will not work with higher taxes.  So, how this means more employment is a mystery to me. And the "loophole closing" is sort of a laugher too. As PERE points out: The introduction of a hybrid rate is an admission by lawmakers that current carry tax is in fact n

I am going to promote some lawyers other than myself today, because they deserve it.  I'm sure the social media "gurus" out there would say I am a moron for doing so, but I honestly do not care.  This blog is a resource and a fun project for me.  Hire me? Great!  Hire them?  Fine, too.  Hire no one at all?  Do so at your peril.... The law firm Goodwin Procter published what I think is an excellent article on subordination, non-disturbance and attornment agreements (SNDAs) recently that I would like to recommend to my readers. This particular piece is in the context of hotel acquisitions rather than your "garden variety" SNDA that you might find in an office, retail or industrial deal among the landlord/buyer, tenant and lender.  The article suggests -- correctly in my opinion -- that buyers are getting stuck between the lender and the hotel operator on higher end hotel deals because of the competing interests of the parties.  The lender obviously wants as much

I feel like Clark W. Griswold, having just come off the road and 4600 miles of driving.  It was fun but tiring and I am paying the price for my trip with a wonderful summer cold. So if you will all indulge me, here are my thoughts about the last two weeks. ICSC's RECon meeting in Las Vegas was great.  It was so good to put a few faces and voices together, some of whom I have known only by the latter for ten years.  We also had a great tweetup at the meeting; my only regret was that I could not stay the whole hour.  As to my sense of the show, the smaller size meant the floors were crowded. Not the Eisenhower Expressway at rush hour, but crowded enough.  Tenants were telling landlords that they wanted and needed to be in certain locations, but on terms that may have been a little less favorable to landlords -- perhaps shorter terms and more options, rent concessions, etc.  There may not have been the urgency of a few years ago (remember I was a first timer) but these meetings were,