Texas Energy Ventures Inks New Lease
Firm Subleases 33,500 SF at ABB Lummus Bldg.
Texas Energy Ventures LLC, a privately held retail and wholesale energy holding company, signed a deal to sublease 33,587 square feet from ABB Inc. for three years at 3010 Briarpark Drive in Houston, TX. Currently, Texas Energy has Houston offices at 1235 N. Loop West and 2603 Augusta. Those locations will be consolidated and the company will fully occupy its new space early this month. The Equis Corp. team of Thomas R.E. McKenzie, Bruce A. Fehn and Joshua Marcell represented Texas Energy Ventures, while Lucian Bukowski of The Staubach Co. handled the deal for ABB Inc. For more information on great subleases check out:
www.houstonrealtyadvisors.net
Thursday, March 8, 2007
Wednesday, March 7, 2007
Landlord Found in Breach
Landlord found in breach of stipulation to pay surrender amount for Tenant's early vacatur.
from The New York Law Journal, June 15, 2006
"Respondent Vista Media Group, Inc. (Vista) moves for an order restoring this commercial holdover proceeding to the trial calendar; and upon such restoration, directing petitioner One York Property, LLC (One
York) to comply with the stipulation of settlement dated March 31, 2005 and for judgment in the amount of $294,250 plus costs and legal fees.
Petitioner opposes the motion.
Pursuant to a lease dated June 4, 1999, One York is the successor landlord and Vista was the successor-tenant of that portion of the roof of a building located at 55 Avenue of the Americas (premises) on which Vista owned and operated an outdoor advertising sign structure, i.e., a billboard. The lease was for a ten year term, commencing on July 1, 1999, and expiring June 30, 2009.
One York Property LLC v. Vista Media Group Inc., 068991/05
Decided: May 17, 2006
On March 31, 2005, the parties entered into a lease modification and termination agreement (termination agreement), accelerating the termination date of the lease from June 30, 2009 to March 31, 2005 (termination date). The termination agreement provides that, notwithstanding the acceleration of the termination date to March 31, 2005, Vista may remain in possession of the premises through January 15,
2006 (vacate date).
In order to fully effectuate the agreement between One York and Vista with regard to their respective rights and obligations following the termination date and through the vacate date, as agreed by the parties, One York commenced a holdover proceeding in this Court on April 27, 2005. The holdover proceeding was resolved by the written stipulation of settlement which was so ordered by the Court. The stipulation of settlement provides that, on or before the vacate date, Vista shall remove all of its property from the premises other than the advertising device and deliver vacant possession thereof to One York. The stipulation of settlement provides further that the billboard and any other property remaining on the premises after the vacate date shall be deemed abandoned by Vista and One York may take possession of same without accountability to Vista.
In consideration of Vista's undertakings and provided Vista timely vacates the premises on or before the vacate date, the stipulation of settlement provides, in paragraph 10, that One York shall pay to Vista the sum of $294,250 (the 'surrender amount') simultaneously with Vista's actual vacatur of the premises in accordance with all of the terms and provisions of this stipulation. The stipulation of settlement provides further that [n]otwithstanding any other provisions of this stipulation or the lease, in the event the surrender amount is not paid in accordance with the provisions of this paragraph 10, the vacate date shall be postponed to the date on which the surrender amount is paid to Vista. The stipulation of settlement also states that this Court shall retain jurisdiction to enforce the terms of this stipulation in the event of a default by either party.
The moving affidavit of Christopher T. Young, the president of Vista, alleges that respondent surrendered possession of the premises to One York as of January 10, 2006-five days before the vacate date provided in the stipulation of settlement-and requested that petitioner pay the surrender amount to respondent. Mr. Young states that he spoke with Stanley Perelman, the principal of One York, and advised him of respondent's surrender of the premises and demand for payment of the surrender amount.
Mr. Young alleges further that:
(1) Vista has fully complied with its obligations under the stipulation of settlement and surrendered possession in good faith;
(2) One York has refused and continues to refuse to pay the surrender amount to Vista in breach of the stipulation of settlement;
(3) Vista is fully entitled to receive its bargained-for consideration-the surrender amount-without any further delay; and
(4) Vista is entitled to an award of reasonable attorney's fees pursuant to paragraph 8(i) of the termination agreement.
In opposition, Mr. Perelman argues that respondent's motion must be denied, in its entirety, as a matter of law on grounds that:
i) after entering into the stipulation of settlement, this summary proceeding was terminated and respondent's damages are limited to those attributable to breach of such agreement, which damages must be sought in a separate action in Supreme Court;
ii) this Court, which is a court of limited jurisdiction, lacks jurisdiction over respondent's claims for injunctive or equitable relief seeking to compel petitioner to pay respondent the amount of $294,250 plus costs and legal fees;
iii) this Court no longer has jurisdiction over this summary proceeding because respondent has surrendered possession of the premises; and
iv) under the operative agreements, respondent is obligated to pay petitioner for structural damage it allegedly caused to the premise, petitioner does not owe respondent anything, and this Court lacks jurisdiction over the parties' post-settlement monetary claims.
The Court of Appeals addressed whether a stipulation settling a lawsuit may be enforced by way of motion or plenary action in Teitelbaum Holdings, Ltd. v. Gold, 48 N.Y.2d 51, 396 N.E.2d 1029 (1979). There, the Court wrote:
A settlement agreement entered into by parties to a lawsuit does not terminate the action unless there has been an express stipulation of discontinuance or actual entry of judgment in accordance with the terms of the settlement. Absent such termination, the court retains its supervisory power over the action and may lend aid to a party who had moved for enforcement of the settlement. Thus, under Teitelbaum, we must look to the language of the stipulation of settlement to determine whether the instant action was terminated.
Vista consented in paragraph 2 of the stipulation to the issuance, forthwith, of a judgment of possession ('Judgment') in favor of One York and against all respondents. Paragraph 21 of the stipulation states:
The parties agree that this stipulation may be so ordered by any judge or judicial hearing officer of the Civil Court and that any judge or judicial hearing officer may issue the judgment and warrant provided for herein without further notice to any party.
At first glance, the language in paragraphs 2 and 21 suggests that the parties contemplated that a judgment would be entered following the execution of the stipulation. However, another provision in the stipulation clearly reveals that the parties did not intend the stipulation to deprive this Court of authority to enforce it.
Paragraph 18 of the stipulation plainly states:
The Court shall retain jurisdiction to enforce the terms of the stipulation in the event of a default by either party.
In light of the above provision, there is no question that this Court retains the power to enforce the stipulation by way of motion. Where, as here, the discontinuance of the action was, in effect, conditioned upon the proper payment of the amount provided in the stipulation of settlement, the parties did not unequivocally terminate the action. See, e.g., Berrian v. McCombs, 280 A.D.2d 442, 720 N.Y.S.2d 513 (2nd Dep't.
2001). Accordingly, respondent may enforce the stipulation by motion in this Court and is not required to file a separate plenary action in Supreme Court.
Petitioner's 2nd contention is that this Court, which is a court of limited jurisdiction, lacks jurisdiction over respondent's claim for injunctive or equitable relief. Petitioner's contention is meritless for several reasons.
We disagree with petitioner's contention that respondent is seeking injunctive or equitable relief. An adequate remedy-at-law exists when the movant can be made whole or compensated by way of monetary damages.
Ansonia Associates v. Ansonia Residents' Association, 78 A.D.2d 211, 214 (1st Dep't. 1980) (If adequate relief can be obtained by a money judgment there is no need for equitable relief). In the instant motion, respondent asks the Court to enforce the stipulation by directing petitioner to pay a specific sum of money. Where, as here, a stipulation may be enforced by the entry of a money judgment, an adequate remedy-at-law clearly exists.
Even if we were to assume for the sake of argument that respondent is seeking equitable or injunctive relief, the Appellate Division has held that, if a lower court can address a landlord-tenant dispute, it is generally desirable that it do so.
In Lexington Avenue Associates v. Kandell, 283 A.D.2d 379 (1st Dep't.
2001), the Appellate Division wrote:
Civil Court has jurisdiction of landlord tenant disputes and when it can decide the dispute, as in this case, it is desirable that it do so.
Here, Civil Court has jurisdiction to enforce the subject stipulation of settlement, which, in the context of a Civil Court nonpayment summary proceeding, requires defendant to vacate the apartment that plaintiff temporarily gave her while repairs to her apartment were ongoing, and to re-occupy her own apartments, upon certain stated conditions, and also provides for Civil Court's continuing jurisdiction for purposes of its implementation. Clearly, Civil Court should be the forum to decide whether the conditions stated in the stipulation exist, and to award any incidental relief to which plaintiff may be entitled, including rent, use and occupancy and attorneys' fees, if they do.
Likewise, the case of 1029 Sixth, LLC v. Riniv Corporation, 9 A.D.3d 142 (1st Dep't. 2004), is instructive. In Riniv, four companion commercial holdover proceedings were settled by so-ordered stipulations. The landlord appealed from orders of the Appellate Term, which reversed the Civil Court and required the landlord to make payments to respondent-tenants pursuant to their stipulations. The Appellate Division agreed with the Civil Court's view, and concluded that the Appellate Term was wrong in excusing the tenants' failure to comply with the terms of the stipulation and requiring the landlord to comply with the stipulation despite the tenants' default.
In Riniv, it is important to note that the reviewing courts tacitly assumed that Civil Court had the authority to enforce the stipulation of settlement. No one raised the jurisdiction of Civil Court as an issue.
The silence of both the Appellate Term and Appellate Division implies that Civil Court has jurisdiction to enforce stipulations of settlement involving commercial holdover proceedings.
The petitioner's contention is meritless because the stipulation states on its face that this Court shall retain jurisdiction. The stipulation does not state that this Court relinquished jurisdiction once respondent surrendered possession. Petitioner's final contention is that, under the operative agreements, respondent is obligated to pay petitioner for structural damage it allegedly caused to the premises; consequently, petitioner does not owe respondent anything, and this Court lacks jurisdiction over the parties' post-settlement monetary claims.
Petitioner's final contention is patently meritless. On its face, the stipulation required respondent to surrender possession by a date certain; in exchange, petitioner was to pay $294,250 to respondent. It is undisputed that respondent surrendered possession in a timely manner, and petitioner concedes that it has paid respondent nothing.
The Court has reviewed the stipulation carefully. However, the stipulation does not state that petitioner is permitted to deduct the cost of any alleged damage from the $294,250 sum specifically provided for in the stipulation, nor does it state that said payment is conditioned upon surrender of the premises in a certain condition.
For all of the above reasons, respondent's motion to restore this matter to the trial calendar is granted. The Court further finds that petitioner breached the stipulation by failing to pay $294,250 which was the bargained-for consideration for the acceleration of the termination date of the lease and surrender of the roof space.
Respondent's request for attorney's fees pursuant to paragraph 8(i) of the termination agreement is also granted.
Paragraph 8(a) of the termination agreement provides:
This agreement when read together with the stipulation of settlement, constitutes the entire agreement between the parties with respect to the subject matter hereof, and all understandings and agreements heretofore or simultaneously had between the parties are merged in and are contained in this agreement.
In the event Owner or Tenant shall commence litigation against the other to enforce its rights under this agreement or the lease, the prevailing party shall be entitled to recover from the other the reasonable costs and expenses (including reasonable attorneys' fees) thereby incurred.
Respondent is entitled to an award of reasonable attorneys' fees under the above provisions as it is the prevailing party. Accordingly, respondent's attorney is directed to prepare an affirmation of services and to serve said affirmation upon petitioner. If petitioner objects to the amount of attorneys' fees, the Court will schedule a hearing to resolve the dispute, upon application.
The clerk is directed to enter judgment in favor of respondent and against petitioner in the sum of $294,250 plus costs together with interest at the statutory rate from January 15, 2006 onward." For more information see: www.houstonrealtyadvisors.net
from The New York Law Journal, June 15, 2006
"Respondent Vista Media Group, Inc. (Vista) moves for an order restoring this commercial holdover proceeding to the trial calendar; and upon such restoration, directing petitioner One York Property, LLC (One
York) to comply with the stipulation of settlement dated March 31, 2005 and for judgment in the amount of $294,250 plus costs and legal fees.
Petitioner opposes the motion.
Pursuant to a lease dated June 4, 1999, One York is the successor landlord and Vista was the successor-tenant of that portion of the roof of a building located at 55 Avenue of the Americas (premises) on which Vista owned and operated an outdoor advertising sign structure, i.e., a billboard. The lease was for a ten year term, commencing on July 1, 1999, and expiring June 30, 2009.
One York Property LLC v. Vista Media Group Inc., 068991/05
Decided: May 17, 2006
On March 31, 2005, the parties entered into a lease modification and termination agreement (termination agreement), accelerating the termination date of the lease from June 30, 2009 to March 31, 2005 (termination date). The termination agreement provides that, notwithstanding the acceleration of the termination date to March 31, 2005, Vista may remain in possession of the premises through January 15,
2006 (vacate date).
In order to fully effectuate the agreement between One York and Vista with regard to their respective rights and obligations following the termination date and through the vacate date, as agreed by the parties, One York commenced a holdover proceeding in this Court on April 27, 2005. The holdover proceeding was resolved by the written stipulation of settlement which was so ordered by the Court. The stipulation of settlement provides that, on or before the vacate date, Vista shall remove all of its property from the premises other than the advertising device and deliver vacant possession thereof to One York. The stipulation of settlement provides further that the billboard and any other property remaining on the premises after the vacate date shall be deemed abandoned by Vista and One York may take possession of same without accountability to Vista.
In consideration of Vista's undertakings and provided Vista timely vacates the premises on or before the vacate date, the stipulation of settlement provides, in paragraph 10, that One York shall pay to Vista the sum of $294,250 (the 'surrender amount') simultaneously with Vista's actual vacatur of the premises in accordance with all of the terms and provisions of this stipulation. The stipulation of settlement provides further that [n]otwithstanding any other provisions of this stipulation or the lease, in the event the surrender amount is not paid in accordance with the provisions of this paragraph 10, the vacate date shall be postponed to the date on which the surrender amount is paid to Vista. The stipulation of settlement also states that this Court shall retain jurisdiction to enforce the terms of this stipulation in the event of a default by either party.
The moving affidavit of Christopher T. Young, the president of Vista, alleges that respondent surrendered possession of the premises to One York as of January 10, 2006-five days before the vacate date provided in the stipulation of settlement-and requested that petitioner pay the surrender amount to respondent. Mr. Young states that he spoke with Stanley Perelman, the principal of One York, and advised him of respondent's surrender of the premises and demand for payment of the surrender amount.
Mr. Young alleges further that:
(1) Vista has fully complied with its obligations under the stipulation of settlement and surrendered possession in good faith;
(2) One York has refused and continues to refuse to pay the surrender amount to Vista in breach of the stipulation of settlement;
(3) Vista is fully entitled to receive its bargained-for consideration-the surrender amount-without any further delay; and
(4) Vista is entitled to an award of reasonable attorney's fees pursuant to paragraph 8(i) of the termination agreement.
In opposition, Mr. Perelman argues that respondent's motion must be denied, in its entirety, as a matter of law on grounds that:
i) after entering into the stipulation of settlement, this summary proceeding was terminated and respondent's damages are limited to those attributable to breach of such agreement, which damages must be sought in a separate action in Supreme Court;
ii) this Court, which is a court of limited jurisdiction, lacks jurisdiction over respondent's claims for injunctive or equitable relief seeking to compel petitioner to pay respondent the amount of $294,250 plus costs and legal fees;
iii) this Court no longer has jurisdiction over this summary proceeding because respondent has surrendered possession of the premises; and
iv) under the operative agreements, respondent is obligated to pay petitioner for structural damage it allegedly caused to the premise, petitioner does not owe respondent anything, and this Court lacks jurisdiction over the parties' post-settlement monetary claims.
The Court of Appeals addressed whether a stipulation settling a lawsuit may be enforced by way of motion or plenary action in Teitelbaum Holdings, Ltd. v. Gold, 48 N.Y.2d 51, 396 N.E.2d 1029 (1979). There, the Court wrote:
A settlement agreement entered into by parties to a lawsuit does not terminate the action unless there has been an express stipulation of discontinuance or actual entry of judgment in accordance with the terms of the settlement. Absent such termination, the court retains its supervisory power over the action and may lend aid to a party who had moved for enforcement of the settlement. Thus, under Teitelbaum, we must look to the language of the stipulation of settlement to determine whether the instant action was terminated.
Vista consented in paragraph 2 of the stipulation to the issuance, forthwith, of a judgment of possession ('Judgment') in favor of One York and against all respondents. Paragraph 21 of the stipulation states:
The parties agree that this stipulation may be so ordered by any judge or judicial hearing officer of the Civil Court and that any judge or judicial hearing officer may issue the judgment and warrant provided for herein without further notice to any party.
At first glance, the language in paragraphs 2 and 21 suggests that the parties contemplated that a judgment would be entered following the execution of the stipulation. However, another provision in the stipulation clearly reveals that the parties did not intend the stipulation to deprive this Court of authority to enforce it.
Paragraph 18 of the stipulation plainly states:
The Court shall retain jurisdiction to enforce the terms of the stipulation in the event of a default by either party.
In light of the above provision, there is no question that this Court retains the power to enforce the stipulation by way of motion. Where, as here, the discontinuance of the action was, in effect, conditioned upon the proper payment of the amount provided in the stipulation of settlement, the parties did not unequivocally terminate the action. See, e.g., Berrian v. McCombs, 280 A.D.2d 442, 720 N.Y.S.2d 513 (2nd Dep't.
2001). Accordingly, respondent may enforce the stipulation by motion in this Court and is not required to file a separate plenary action in Supreme Court.
Petitioner's 2nd contention is that this Court, which is a court of limited jurisdiction, lacks jurisdiction over respondent's claim for injunctive or equitable relief. Petitioner's contention is meritless for several reasons.
We disagree with petitioner's contention that respondent is seeking injunctive or equitable relief. An adequate remedy-at-law exists when the movant can be made whole or compensated by way of monetary damages.
Ansonia Associates v. Ansonia Residents' Association, 78 A.D.2d 211, 214 (1st Dep't. 1980) (If adequate relief can be obtained by a money judgment there is no need for equitable relief). In the instant motion, respondent asks the Court to enforce the stipulation by directing petitioner to pay a specific sum of money. Where, as here, a stipulation may be enforced by the entry of a money judgment, an adequate remedy-at-law clearly exists.
Even if we were to assume for the sake of argument that respondent is seeking equitable or injunctive relief, the Appellate Division has held that, if a lower court can address a landlord-tenant dispute, it is generally desirable that it do so.
In Lexington Avenue Associates v. Kandell, 283 A.D.2d 379 (1st Dep't.
2001), the Appellate Division wrote:
Civil Court has jurisdiction of landlord tenant disputes and when it can decide the dispute, as in this case, it is desirable that it do so.
Here, Civil Court has jurisdiction to enforce the subject stipulation of settlement, which, in the context of a Civil Court nonpayment summary proceeding, requires defendant to vacate the apartment that plaintiff temporarily gave her while repairs to her apartment were ongoing, and to re-occupy her own apartments, upon certain stated conditions, and also provides for Civil Court's continuing jurisdiction for purposes of its implementation. Clearly, Civil Court should be the forum to decide whether the conditions stated in the stipulation exist, and to award any incidental relief to which plaintiff may be entitled, including rent, use and occupancy and attorneys' fees, if they do.
Likewise, the case of 1029 Sixth, LLC v. Riniv Corporation, 9 A.D.3d 142 (1st Dep't. 2004), is instructive. In Riniv, four companion commercial holdover proceedings were settled by so-ordered stipulations. The landlord appealed from orders of the Appellate Term, which reversed the Civil Court and required the landlord to make payments to respondent-tenants pursuant to their stipulations. The Appellate Division agreed with the Civil Court's view, and concluded that the Appellate Term was wrong in excusing the tenants' failure to comply with the terms of the stipulation and requiring the landlord to comply with the stipulation despite the tenants' default.
In Riniv, it is important to note that the reviewing courts tacitly assumed that Civil Court had the authority to enforce the stipulation of settlement. No one raised the jurisdiction of Civil Court as an issue.
The silence of both the Appellate Term and Appellate Division implies that Civil Court has jurisdiction to enforce stipulations of settlement involving commercial holdover proceedings.
The petitioner's contention is meritless because the stipulation states on its face that this Court shall retain jurisdiction. The stipulation does not state that this Court relinquished jurisdiction once respondent surrendered possession. Petitioner's final contention is that, under the operative agreements, respondent is obligated to pay petitioner for structural damage it allegedly caused to the premises; consequently, petitioner does not owe respondent anything, and this Court lacks jurisdiction over the parties' post-settlement monetary claims.
Petitioner's final contention is patently meritless. On its face, the stipulation required respondent to surrender possession by a date certain; in exchange, petitioner was to pay $294,250 to respondent. It is undisputed that respondent surrendered possession in a timely manner, and petitioner concedes that it has paid respondent nothing.
The Court has reviewed the stipulation carefully. However, the stipulation does not state that petitioner is permitted to deduct the cost of any alleged damage from the $294,250 sum specifically provided for in the stipulation, nor does it state that said payment is conditioned upon surrender of the premises in a certain condition.
For all of the above reasons, respondent's motion to restore this matter to the trial calendar is granted. The Court further finds that petitioner breached the stipulation by failing to pay $294,250 which was the bargained-for consideration for the acceleration of the termination date of the lease and surrender of the roof space.
Respondent's request for attorney's fees pursuant to paragraph 8(i) of the termination agreement is also granted.
Paragraph 8(a) of the termination agreement provides:
This agreement when read together with the stipulation of settlement, constitutes the entire agreement between the parties with respect to the subject matter hereof, and all understandings and agreements heretofore or simultaneously had between the parties are merged in and are contained in this agreement.
In the event Owner or Tenant shall commence litigation against the other to enforce its rights under this agreement or the lease, the prevailing party shall be entitled to recover from the other the reasonable costs and expenses (including reasonable attorneys' fees) thereby incurred.
Respondent is entitled to an award of reasonable attorneys' fees under the above provisions as it is the prevailing party. Accordingly, respondent's attorney is directed to prepare an affirmation of services and to serve said affirmation upon petitioner. If petitioner objects to the amount of attorneys' fees, the Court will schedule a hearing to resolve the dispute, upon application.
The clerk is directed to enter judgment in favor of respondent and against petitioner in the sum of $294,250 plus costs together with interest at the statutory rate from January 15, 2006 onward." For more information see: www.houstonrealtyadvisors.net
Monday, March 5, 2007
Negotiating office leases – from the tenant’s perspective
It is easy for any attorney to lose sight of the major legal and business issues when negotiating office leases.
from the New York Law Journal, June 12, 2006
"The top 10 issues in office leasing, considering the business impact to the tenant: (not necessarily in any particular order of
importance)
1. Term sheets/letters of intent
The tenant will achieve the best results by assembling a full team of professionals to handle the transaction, including a real estate attorney, an architect or space planner, a general contractor, construction manager of construction consultant, an insurant consultant, and an experienced real estate broker.
2. Assignment and subletting
If the tenant's business changes such that it needs more or less space, or needs to relocate, the assignment and subletting provision is the vehicle for addressing these and many other issues.
3. Alteration rights
Space becomes old and tired after 5 to 10 years and needs sprucing up, and a tenant's business structure changes, requiring a different layout for its office space.
4. Building services
These need to be clearly enunciated. For example, is electricity included in the lease, is it charged based on rent inclusion, is it charged based on submetering, may the tenant obtain directly metered electricity and what profit component or expense reimbursements may the landlord charge?
5. Security deposits
Of critical important to both landlord and tenant is who the tenant is, what its creditworthiness is, and what credit support, such as cash security deposit or letters of credit, are provided.
6. Guarantees
Over the past 10 years, so-called good guy lease guarantees have become much more common in leasing transactions. A good guy guarantee is a limited guarantee of the lease designed to assure the landlord that possession of the premises will be returned to it in the event of a default by the tenant and termination of the lease, without the need for the landlord to go to court and evict the tenant, and without the risk of having to deal with a bankruptcy filing and other delays by the tenant.
7. Subordination and nondisturbance
For larger or more creditworthy tenants, or those with more negotiating leverage, it is important to try to obtain a nondisturbance agreement from all current and future lenders and ground lessors.
8. Tenant defaults and Landlord remedies
Almost all references to a default by the tenant under the lease should be qualified to refer to a default after notice if required under lease, and expiration of any applicable cure period. In this way, the tenant gets the benefit of its negotiated notice and cure rights under the default provision. Most or all of the default provisions should spell out that the tenant will receive notice and an opportunity to cure before the landlord may terminate the lease.
9. Landlord Defaults
It is rare that there is a provision spelling out landlord defaults and giving notice and cure opportunities or tenant remedies. On occasion, a tenant with more leverage in a negotiation can get a landlord to agree to grant it a similar notice and cure provision and remedies for defaults. However, that is a rare exception, generally applicable only to large gorilla tenants.
10. End of Term
The scope of the tenant's restoration obligation should be negotiated up front, and an effort made to get the landlord to agree that typical tenant improvements that will not cost the landlord an excessive amount to demolish or remove, and are not extremely difficult to remove, can remain. Tenants must also anticipate that their new space may not be ready exactly on time at the expiration of the lease.
Some leases will also allow landlords to collect, in addition to or in lieu of the increased (holdover) rent, all of its damages suffered in connection with a holdover. Those damages can amount to many millions of dollars as a result of losing a new deal with a new tenant." For more information see: www.houstonrealtyadvisors.net
from the New York Law Journal, June 12, 2006
"The top 10 issues in office leasing, considering the business impact to the tenant: (not necessarily in any particular order of
importance)
1. Term sheets/letters of intent
The tenant will achieve the best results by assembling a full team of professionals to handle the transaction, including a real estate attorney, an architect or space planner, a general contractor, construction manager of construction consultant, an insurant consultant, and an experienced real estate broker.
2. Assignment and subletting
If the tenant's business changes such that it needs more or less space, or needs to relocate, the assignment and subletting provision is the vehicle for addressing these and many other issues.
3. Alteration rights
Space becomes old and tired after 5 to 10 years and needs sprucing up, and a tenant's business structure changes, requiring a different layout for its office space.
4. Building services
These need to be clearly enunciated. For example, is electricity included in the lease, is it charged based on rent inclusion, is it charged based on submetering, may the tenant obtain directly metered electricity and what profit component or expense reimbursements may the landlord charge?
5. Security deposits
Of critical important to both landlord and tenant is who the tenant is, what its creditworthiness is, and what credit support, such as cash security deposit or letters of credit, are provided.
6. Guarantees
Over the past 10 years, so-called good guy lease guarantees have become much more common in leasing transactions. A good guy guarantee is a limited guarantee of the lease designed to assure the landlord that possession of the premises will be returned to it in the event of a default by the tenant and termination of the lease, without the need for the landlord to go to court and evict the tenant, and without the risk of having to deal with a bankruptcy filing and other delays by the tenant.
7. Subordination and nondisturbance
For larger or more creditworthy tenants, or those with more negotiating leverage, it is important to try to obtain a nondisturbance agreement from all current and future lenders and ground lessors.
8. Tenant defaults and Landlord remedies
Almost all references to a default by the tenant under the lease should be qualified to refer to a default after notice if required under lease, and expiration of any applicable cure period. In this way, the tenant gets the benefit of its negotiated notice and cure rights under the default provision. Most or all of the default provisions should spell out that the tenant will receive notice and an opportunity to cure before the landlord may terminate the lease.
9. Landlord Defaults
It is rare that there is a provision spelling out landlord defaults and giving notice and cure opportunities or tenant remedies. On occasion, a tenant with more leverage in a negotiation can get a landlord to agree to grant it a similar notice and cure provision and remedies for defaults. However, that is a rare exception, generally applicable only to large gorilla tenants.
10. End of Term
The scope of the tenant's restoration obligation should be negotiated up front, and an effort made to get the landlord to agree that typical tenant improvements that will not cost the landlord an excessive amount to demolish or remove, and are not extremely difficult to remove, can remain. Tenants must also anticipate that their new space may not be ready exactly on time at the expiration of the lease.
Some leases will also allow landlords to collect, in addition to or in lieu of the increased (holdover) rent, all of its damages suffered in connection with a holdover. Those damages can amount to many millions of dollars as a result of losing a new deal with a new tenant." For more information see: www.houstonrealtyadvisors.net
Biotics Research Corporation Building
Real Estate Beat
Rosenberg begins project for first tenant in city business park
Houston Business Journal - March 27, 1998
by Laura A. Stromberg
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The city of Rosenberg has begun construction on a facility for the first tenant in its new Reading Center Business Park.
Biotics Research Corp. will be relocating about 55 employees from a site in Stafford in November, when the company's 42,000-square-foot facility is expected to be ready for move-in.
The facility is the first of a proposed three-phase development project for Biotics.
The 84-acre park is the first truly dedicated business park for Rosenberg, says City Manager Bill Knesek.
"With Biotics coming into the park, we'll now be able to start the infra-structure," Knesek says. "We're very excited about this. It now allows us to have ready-to-go sites."
The entire park is owned by Tilley Investment-Rosenberg, a limited partnership headed by local businessman Alan King.
Tilley was represented by Beeman Strong of Beeman Strong & Co. in the Biotics transaction.
Amelang Partners will develop the new facility for Biotics, with Rocky Stevens heading the project.
Biotics was represented by Ed Ayres of Houston Realty Advisors, Inc. www.houstonrealtyadvisors.net
Biotics, a 20-year-old company, manufactures specially designed nutritional products.
The company currently employs 55 and plans to create an additional 25 jobs in production and supervisory positions.
Rosenberg begins project for first tenant in city business park
Houston Business Journal - March 27, 1998
by Laura A. Stromberg
Print this Article
Email this Article
Reprints
RSS Feeds
Most Viewed
Most Emailed
The city of Rosenberg has begun construction on a facility for the first tenant in its new Reading Center Business Park.
Biotics Research Corp. will be relocating about 55 employees from a site in Stafford in November, when the company's 42,000-square-foot facility is expected to be ready for move-in.
The facility is the first of a proposed three-phase development project for Biotics.
The 84-acre park is the first truly dedicated business park for Rosenberg, says City Manager Bill Knesek.
"With Biotics coming into the park, we'll now be able to start the infra-structure," Knesek says. "We're very excited about this. It now allows us to have ready-to-go sites."
The entire park is owned by Tilley Investment-Rosenberg, a limited partnership headed by local businessman Alan King.
Tilley was represented by Beeman Strong of Beeman Strong & Co. in the Biotics transaction.
Amelang Partners will develop the new facility for Biotics, with Rocky Stevens heading the project.
Biotics was represented by Ed Ayres of Houston Realty Advisors, Inc. www.houstonrealtyadvisors.net
Biotics, a 20-year-old company, manufactures specially designed nutritional products.
The company currently employs 55 and plans to create an additional 25 jobs in production and supervisory positions.
Sunday, March 4, 2007
Florida has High drama over higher fees
Developers fear a construction slowdown, more sprawl.
from Orlando Business Journal, June 12, 2006
"Proposed transportation impact fee increases, including one that could hike right-of-way costs nearly seven times above today's amount, could halt new construction and push developers out of Orlando and into other areas, further contributing to urban sprawl.
That's the alarming assessment of commercial real estate owners and developers.
If adopted at 100 percent, we're really concerned (the city of Orlando's fee increase) is going to have a very negative effect on commercial and residential growth. Because of the rapid rise in construction costs and a need to help alleviate crowded roads, city and county officials, however, argue the changes are necessary.
Still, commercial developers and owners face a double-whammy as cities and counties play catch-up on transportation infrastructure.
Orange County, for instance, has an estimated $3 billion infrastructure deficit.
Meanwhile, the existing fee assessed by the city for right of way is $50,000 an acre and construction is $588,000 per lane mile. The updated fee using Florida Department of Transportation cost averages, however, would be $396,748 per acre -- a 693 percent increase -- and
$1.6 million per lane mile for construction -- or a 170 percent increase.
In addition, all city and county governments in Florida must adopt a new fee by Dec. 1 that will help them catch up on transportation infrastructure.
Orange County already has adopted the new fee, which doubles what developers must pay for road infrastructure.
The city of Orlando levies impact fees to pay for additional demands placed by new development on transportation infrastructure. Adopted in 1986 and last evaluated a decade ago, the city's rate has fallen behind many of the surrounding jurisdictions, Orlando transportation officials argue. A comparison shows Apopka and Ocoee charge much more, $2,772 and $3,968, respectively, for a single-family unit, than Orlando's $1,192.
The fees would help pay for several planned or ongoing projects with money still owed: Narcoossee Road, $14.2 million over nine years; Crystal Lake Drive, $8 million over 10 years; John Young Parkway,
$1.5 million over four years; and Lee Vista Blvd., $2 million over four years.
The proposal will go before the Orlando City Council on June 19. If the Council members approve the new fees as recommended, they would take effect on Oct. 1. Meanwhile, Orange County has replaced its former transportation fees system. Adopted in 1996, the county's pay- as-you-go system was based on state concurrency legislation that allowed the county to figure out how it would require developers and owners to pay for their fair share of transportation impacts. If a road was over capacity, a developer could pay an extra fee and move ahead with the project. The problem with the system was the county undercharged developers and has lost a total of $46 million because it underestimated road construction costs by 50 percent and undercharged impact fees by more than half. In 2005, the Legislature created another program called proportionate fair share, which provided the county with a standard formula that essentially doubles the fair share fee. Further, as of March 28, the at-capacity road must be on Orange County's list of roads slated for improvement.
Otherwise, the county will deny the building permit. Fees would increase nearly eight times for right-of-way purchases and more than twice the cost of building new lanes on roadways.
The timing of the proposed fees, some say, couldn't be worse.
Predictions are for double-digit hikes in material costs in 2006, with prices for plumbing pipes rising 20-50 percent; diesel fuel, which runs construction equipment, 20-30 percent higher; and cement increasing 10-15 percent over 2005. Such additional costs, some fear, could grind some development to a screeching halt.
Developers don't seem as concerned about the county's increases as they are with the city's. Nevertheless, they are worried about Orange's fees relative to other Central Florida counties."
For more information see: www.houstonrealtyadviosrs.net
from Orlando Business Journal, June 12, 2006
"Proposed transportation impact fee increases, including one that could hike right-of-way costs nearly seven times above today's amount, could halt new construction and push developers out of Orlando and into other areas, further contributing to urban sprawl.
That's the alarming assessment of commercial real estate owners and developers.
If adopted at 100 percent, we're really concerned (the city of Orlando's fee increase) is going to have a very negative effect on commercial and residential growth. Because of the rapid rise in construction costs and a need to help alleviate crowded roads, city and county officials, however, argue the changes are necessary.
Still, commercial developers and owners face a double-whammy as cities and counties play catch-up on transportation infrastructure.
Orange County, for instance, has an estimated $3 billion infrastructure deficit.
Meanwhile, the existing fee assessed by the city for right of way is $50,000 an acre and construction is $588,000 per lane mile. The updated fee using Florida Department of Transportation cost averages, however, would be $396,748 per acre -- a 693 percent increase -- and
$1.6 million per lane mile for construction -- or a 170 percent increase.
In addition, all city and county governments in Florida must adopt a new fee by Dec. 1 that will help them catch up on transportation infrastructure.
Orange County already has adopted the new fee, which doubles what developers must pay for road infrastructure.
The city of Orlando levies impact fees to pay for additional demands placed by new development on transportation infrastructure. Adopted in 1986 and last evaluated a decade ago, the city's rate has fallen behind many of the surrounding jurisdictions, Orlando transportation officials argue. A comparison shows Apopka and Ocoee charge much more, $2,772 and $3,968, respectively, for a single-family unit, than Orlando's $1,192.
The fees would help pay for several planned or ongoing projects with money still owed: Narcoossee Road, $14.2 million over nine years; Crystal Lake Drive, $8 million over 10 years; John Young Parkway,
$1.5 million over four years; and Lee Vista Blvd., $2 million over four years.
The proposal will go before the Orlando City Council on June 19. If the Council members approve the new fees as recommended, they would take effect on Oct. 1. Meanwhile, Orange County has replaced its former transportation fees system. Adopted in 1996, the county's pay- as-you-go system was based on state concurrency legislation that allowed the county to figure out how it would require developers and owners to pay for their fair share of transportation impacts. If a road was over capacity, a developer could pay an extra fee and move ahead with the project. The problem with the system was the county undercharged developers and has lost a total of $46 million because it underestimated road construction costs by 50 percent and undercharged impact fees by more than half. In 2005, the Legislature created another program called proportionate fair share, which provided the county with a standard formula that essentially doubles the fair share fee. Further, as of March 28, the at-capacity road must be on Orange County's list of roads slated for improvement.
Otherwise, the county will deny the building permit. Fees would increase nearly eight times for right-of-way purchases and more than twice the cost of building new lanes on roadways.
The timing of the proposed fees, some say, couldn't be worse.
Predictions are for double-digit hikes in material costs in 2006, with prices for plumbing pipes rising 20-50 percent; diesel fuel, which runs construction equipment, 20-30 percent higher; and cement increasing 10-15 percent over 2005. Such additional costs, some fear, could grind some development to a screeching halt.
Developers don't seem as concerned about the county's increases as they are with the city's. Nevertheless, they are worried about Orange's fees relative to other Central Florida counties."
For more information see: www.houstonrealtyadviosrs.net
Thursday, March 1, 2007
Houston High-Rise Trades to Private New York Investment Firm
Broadway Partners purchased the One City Centre office tower, at 1021 Main St. in Houston, from AEW/McCord Development for $115 million, or $193 per square foot. The 594,595-square-foot, 29-story tower is in Houston's Central Business District. The property underwent a major renovation in 2000 that upgraded lobbies and common areas, fiber-optic connectivity and communication systems, and added new street tunnel retail space. "This is a well-located asset in a thriving market -- it presents considerable strategic opportunity for us and our investors," said James Hennessy, director of acquisitions for Broadway, the privately held real estate investment and management firm headquartered in New York. Eric Anderson and David Baker of Transwestern will handle leasing for Broadway. Joyce Harberson of the Navisys Group will continue to handle property management. There were no brokers involved in the transaction. Please refer to CoStar Comp #1212890 for further details. For more information see ; www.houstonrealtyadvisors.net
Wall Street Slide Highlight Real Estate Vulnerability
The reaction of REIT prices on Tuesday to tumbling Wall Street stocks reveal disquieting links between the two. This week’s 3.3% plunge in the Dow Jones Industrial Average was a financial event triggered by a stock sell-off in Shanghai rather than by an economic shift, real estate researchers say. Theoretically, real estate fundamentals are driven more by the economy than by volatile financial markets. Yet REIT prices dropped more than 3.2% on Tuesday, highlighting the role of stockholder sentiment in REIT pricing. “Diversification doesn’t always help you,” comments Clint Myers, a real estate economist at Boston-based Property & Portfolio Research. “China falls, the Dow falls, but then it brought REITs down with it. That’s not how diversification is supposed to work.” The week’s events appeared to have been triggered by remarks Alan Greenspan made to Chinese investors, in which the former Fed chairman mentioned the possibility of a U.S. recession. Fears of stifled corporate profits due to a U.S. recession resulted in a 9% slide in Shanghai stock prices, sparking sell-offs in markets around the world. Analysts say the Feb. 27 price drop reflects increasing investor aversion to risk, or an expectation of greater returns (and lower prices) to reflect an investment’s risk. “In some ways, the (stock) market can be seen as a barometer of sentiment,” says Jaime Woodwell, senior director of commercial/multifamily research at the Mortgage Bankers Association. Commercial real estate has traditionally been treated as a less-volatile – and therefore less risky – investment than corporate stocks. That’s due to the intrinsic value of hard assets in addition to income generated by properties, and because profits are driven by real estate fundamentals rather than financial markets. The recent slide shows that argument only goes so far, at least for REIT prices, which fell nearly in step with the Dow. “The question becomes, is that sentiment carrying over into any fundamentals in the commercial real estate market?” Woodwell says. On the lending front, borrowers may benefit in the short term, according to PPR’s Myers. That’s because investors fleeing the stock market and buying into the safety of U.S. Treasuries drove up prices – and drove down yields – on the benchmark 10-Year Treasury note from to a two-month low closing rate of 4.5% from 4.63% the previous day. But will lenders lower mortgage rates? Maybe not, if the greater appreciation of risk premiums today influences them to require a greater spread from Treasuries, according to John Burford, senior vice president and investment portfolio manager at The International Bank of Miami. “They would tend to let that spread widen as an indication of risk.” Banks are more likely to lessen risk exposure by tightening lending standards rather than raising mortgage rates, says Burford, who makes both residential and commercial real estate loans. “Some may try to take fewer chances, with lower loan-to-value ratios, maybe.” As long as businesses remain profitable and consumers enjoy high employment levels and salary increases, Burford expects the economic expansion to continue and to drive demand for commercial real estate. The February market correction is a sign that expansion is nearing an end, however, according to Craig Thomas, senior vice president and director of research and research systems at Boston-based CBRE Torto Wheaton Research. In recent years, aggressive pricing around the globe of everything from bonds to real estate has largely ignored risk, Thomas says. Eventually that overpricing is bound to correct itself, and will likely end the current economic expansion. “What we saw on Tuesday was the first volley,” he says. “It’s a symptom of the imbalance we have, and I expect we’ll see more frequent occurrences,” Thomas adds. “At some point, one of these re-pricings will create a cascade effect that will remove liquidity from our economy, and that will likely be recessionary.” NATIONAL REAL ESTATE INVESTOR by MATT HUDGENS: For more information see www.houstonrealtyadvisors.net
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