The Dirt Lawyer's Blog Archive

Jeff Brown has a first-rate post about real estate investing and the various factors he considers when doing a deal. He reminds us that you cannot just look at the price and the cash flow and say "Sold!" This story is a must-read for the neophyte and a good reminder for even the experienced investor. I would add one other thing to Jeff's list, if I could. Are there legal obstacles that might cause problems down the road? For instance, if the building is destroyed for some reason, can the property be rebuilt in at least the same size and use as it is now? (I'm thinking zoning or other land use changes, etc.) Are are there agreements, restrictive covenants or other binding obligations that could be trouble down the road? Stated more simply, sometimes the price is attractive for a reason that you cannot ascertain without careful due diligence.

And that's a pretty big shove. The neighboring HOA has sued Shelbourne Development , who is developing the Chicago Spire, to rescind its easement agreement allowing certain access to the property. The complaint seeks declaratory relief in chancery. I have not looked at the complaint; I will if someone emails it to me but I have neither the time nor the inclination to go to the Daley Center to grab a copy. Based solely on media reports, here's a quick thought or two. Tom Corfman's article says the plaintiffs are alleging fraud on the part of the defendant and its attorney in that they waited until the easement was signed before revealing "the full scope of the project." If that is true, I can tell you that fraud is not an easy case to win in Illinois. Corfman also reports that Shelbourne doesn't think the HOA owns the land. (I don't know whether there is alternative utility access; if there is I assume it is expensive or hard to access or both. As a ...

To follow up on a previous post here regarding LEED and green buildings, here's some evidence (courtesy of Jordan Crouch) that building green buildings should pay off because of long-term cost savings and tenant demand. This is the wave of the future, folks, so catch it now or be late to the party.

I wrote previously about some firms with large CMBS practices and their plans for what to do with not so busy associates. At the time, one of the firms, Thacher Proffitt & Wood , was not planning any layoffs. But a month later, with no end in sight, reports from Above The Law are that the CMBS heavyweight will probably have to let go about two dozen associates in structured finance and real estate, and first-years in those groups are also apparently being offered generous severance packages given that they apparently have little work to do. As I said before, TPW is a good shop in my opinion and from my experience. It is disappointing to see layoffs might be on the way, but at least they are being honest (how could they NOT be?) by saying that the layoffs are economic-based. And maybe I was wrong before about comebacks in that these firms were probably geared up to do record, unsustainable volumes. I’m just not sure. And, according to the ULI's blog, The Ground F...

Here is an interesting discussion on The Bloodhound Blog on paperless transactions to which I made a recent contribution. Thanks to Jeff Brown for pointing it out. I've been reading about this paperless phenomenon for years. We're still not 100% there in my opinion, and that's okay with me. Call me old fashioned, but I like having the final documents in some tangible form in addition to the PDF copy I usually consult for ease of reference. Thankfully, however, the mountains of due diligence materials I have to review on a deal are all scanned and put into eletronic form, thus making them easier to send around the world. (And we're also saving trees, although some documents just still have to be printed to read carefully. I find that a BIG monitor for the PC helps in this regard.) In most cases, there is just no substitute for a piece of paper with ink on it. And if you want to exchange documents electronically without originals, I like to make sure that you can demand...

The latest on the retail market is mostly slight : slight increase in vacancy, slight increase in rents, and slightly more total space on the market. The only non-slight change is in the amount of retail under construction: that is down by about 600,000 sf from 11.2 to 10.6 million sf (isn't that about 5%? Maybe that is slight too.) Some think that even the retail sector is going into the dumpster. I don't...but I'm a veritable Sgt. Schultz in that regard. I think the holiday season numbers will be telling. Unfortunately Traffic Court tells us the numbers are somewhat confusing . The naysayers are saying we in for a very rough ride, but I still think a cheap dollar and good fundamentals may prevail. And even if they are right, the value deals are what to look for anyway.

I'm sure everyone on the world is going to comment on this New York Times story about perks for BigLaw attorneys. Hey, I remember those days, too...and I don't blame the firms for offering them and the lawyers for demanding them. When you are not home for 14-16 hours a day (I remember them well), you have to have these kinds of bennies. I don't have a masseuse (I do have a cool massaging recliner, though), dry-cleaning pickup (I rarely wear clothes in need of it anyway), free sports tickets, pet insurance or a concierge. (I do, however, have what the Times considers basics such as a Blackberry [who doesn't?] and laptops.) So, what are the perks of my job? And, if you could, would you trade in your lifestyle coaches, mortgage guaranties, car discounts and the like for my benefits? (By the way, can you see why some clients might be irked when they read this story?) 1. Being able to work whenever I want and from wherever I want, with no "face time," requ...