The Dirt Lawyer's Blog Archive

The New York Times had a good piece on the five year anniversary of Kmart buying Sears and becoming Sears Holdings .  At the time, I said that Edward Lampert's acquisition of the retailing icon was as much a real estate acquisition as it was a retail deal. Unfortunately on the retail side, the attitude of many people is, as the last sentence of the piece states succinctly, “Honestly, I’d rather go to Target.”  Sears and Kmart are still doing poorly, and many think the future -- if there is one -- lies in the Sears strategy of trying to become an Amazon.com style retailer.  (Go it its website with all the amalgamation of other sellers there and you will see what I mean.)  Apparently Sears Canada is the company's saving grace. The fallback point?  Dump the dirt at some point. But given the current market even that isn't so attractive according to some analysts, and that makes sense.  For every hot Sears or K-Mart location, according to analyst cited in the Times , there are

I could not resist the old Disneyland ticket system analogy in thinking about the Chicago market right now.  (For you younger folks, search the term and you will understand.) The great news in Chicago?  Two trophy properties are trading.  The Hyatt Center is under contract to The Irvine Company (Billionaire Donald Bren is the long time head of TIC) at what is understood to be just over a 6-cap, or $625 million/$419 per square foot.  I suppose that is not a B-ticket price for that great property.  Then you have 353 North Clark trading from a Mesirow/Friedman Properties venture to Tishman with a purchase price, they say, of $385 million/$321 per square foot.  The difference? Well, while I like both buildings, Hyatt is perhaps better located, but even more important is that little detail of a $374 million construction loan at Clark Street.  So, does this mean we are back?  Not for all of us.  Institutional buying is back to some extent for the right (meaning, Class A) property at the ri

In my first year Contracts class in law school, we learned about liquidated damages; i.e. a clause stating that a  certain amount of money is a reasonable estimate of a party's damages in the event of a default and that, in lieu of litigating the question of damages, the stipulated amount will serve as actual damages and not as a penalty.  Liquidated damages play an important role in many real estate contracts.  I like them for both sides.  It can limit the buyer's downside and quantify the seller's compensation if a deal goes bust.  Most every big deal I run across has a lengthy liquidated damages clause, and more often than not the amount of the earnest money deposit is the stipulated sum.  But this excellent article (about, of all things, the opulent former Adelphia Communications headquarters in Pennsylvania) reminds us that liquidated damages (a) should be tightly drafted; and (b) are supposed to be a reasonable estimate of the actual damages, not a number thrown out

If you look at the blog regularly but do not follow me on Twitter , you will see my updates here on the right of your screen.  I use Twitter for short thoughts (duh) and quick information about what is going on in real estate that interests me.  Long form writing, of course, will remain here. I just wanted to take a moment to thank one of the better bloggers and Twitter folks out there, Duke Long , for including me in his list of the Top 50 Commercial Real Estate People You Must Follow on Twitter. I appreciate the recognition and will try to live up to those standards.