Griffin Partners Buys Houston Office Tower for $114.5M
A joint venture of Griffin Partners and Urdang Capital Management acquired the Class A office tower at 1301 Fannin St. in downtown Houston for $114.5 million, or $144 per square foot. The seller was a partnership between The Shidler Group and Angelo, Gordon & Co. Built in 1983 and renovated in 2004, the 25-story office building totals 795,115 square feet of office and data center space. It sits on 1.4 acres at the corner of Fannin and Polk in the city's Central Business District. The site is 87% occupied by tenants including AIM Management Group, JPMorgan Chase and ExxonMobil. "In late 2006 into 2007, we have been repositioning some of the assets in our portfolio and the opportunity presented itself to sell this exceptional Class A building," said Matt Root, a partner with Shidler. "We believe in the long-term attractiveness of the Houston market and will look for other opportunities to invest here in the future." Griffin Partners was self-represented and will handle leasing and management of the building. Adam Edwards and Dan Broderick of Eastdil Secured, and Matt Root of Shidler Group, represented the selling partnership. For more information see; www.houstonrealtyadvisors.net
Thursday, March 29, 2007
Wednesday, March 28, 2007
From Lease Audits: The Essential Guide
Whenever a landlord or tenant discovers an error from a lease audit, the typical response will be to present the findings to the other side in an effort to obtain a settlement.
"If the tenant has confronted the landlord with the claim, and the landlord and tenant have been unable to resolve the matter through negotiation, how might the tenant proceed?
Tenant self-help
These approaches tend to be quite risky and often quite unwise, but nonetheless the sort of things which an agitated, concerned and self-righteous tenant might consider.
* Withhold rent
* Move out of the premises
* Change tactics, negotiate a lease extension with release of claim by a reason of error as a carrot to landlord to sweeten the terms
* Develop tenant group to make joint claim
* Bad-mouth the landlord
* Decide to currently do nothing
Lawsuits
* Claim for breach of lease
* Claim for fraud
* Claim under RICO (Racketeer Influenced and Corrupt Organizations
Act) or state deceptive practices act
* Claim for negligent misrepresentation
* Claim for declaratory judgment
* Claim for reformation
* Claim for recission
Alternative Dispute Resolution
* Mediation
* Arbitration
The particular size and nature of the error will have an obvious role in framing tenant's choice. The state of the rental market in the locale where the leased premises are located at the time will often be important. The significance of the error in the overall structure of tenant's affairs may substantially control the decisions which the tenant makes. Tenant's analysis of the landlord's likely reaction to tenant's approach will also affect tenant's actions." for more information see; www.houstonrealtyadvisors.net
"If the tenant has confronted the landlord with the claim, and the landlord and tenant have been unable to resolve the matter through negotiation, how might the tenant proceed?
Tenant self-help
These approaches tend to be quite risky and often quite unwise, but nonetheless the sort of things which an agitated, concerned and self-righteous tenant might consider.
* Withhold rent
* Move out of the premises
* Change tactics, negotiate a lease extension with release of claim by a reason of error as a carrot to landlord to sweeten the terms
* Develop tenant group to make joint claim
* Bad-mouth the landlord
* Decide to currently do nothing
Lawsuits
* Claim for breach of lease
* Claim for fraud
* Claim under RICO (Racketeer Influenced and Corrupt Organizations
Act) or state deceptive practices act
* Claim for negligent misrepresentation
* Claim for declaratory judgment
* Claim for reformation
* Claim for recission
Alternative Dispute Resolution
* Mediation
* Arbitration
The particular size and nature of the error will have an obvious role in framing tenant's choice. The state of the rental market in the locale where the leased premises are located at the time will often be important. The significance of the error in the overall structure of tenant's affairs may substantially control the decisions which the tenant makes. Tenant's analysis of the landlord's likely reaction to tenant's approach will also affect tenant's actions." for more information see; www.houstonrealtyadvisors.net
Tuesday, March 27, 2007
Consent to a sublease
Failure to secure consent to a subleasing, as required by the terms of a
lease, does not by itself void a subleasing since it is generally
accepted that lessees may transfer their leases despite restrictions in
their lease against doing so.
from http://www2.blogger.com/www.meislik.com <http://www.meislik.com/>
A subsubtenant sued its sublandlord, seeking damages and the return of
her property after the sublandlord allegedly forcibly removed [the
subsubtenant] from, and took possession of, her massage therapy
business. The sublandlord sought to have the suit dismissed.
Originally, a businesswoman had bought the sublandlord's massage
business and then subleased the premises. Those premises had been
leased by the sublandlord from a real-estate company. The record did
not show whether the sublandlord needed the owner's permission
before making the sublease agreement. The businesswoman then resold the
massage business to the subtenant who thereafter took possession of the
premises, [and] began renovations and conducted business therein.
The sublandlord claimed that the subtenant took possession of the
premises without her knowledge, and the businesswoman's husband
admitted that he sold the business to the subtenant without the
sublandlord's consent or knowledge. Thereafter, the subtenant
claimed that she paid rent directly to the lessor. Later, the subtenant
and the businesswoman each received a letter from the sublandlord
purporting to terminate the original sublease agreement between the
sublandlord and the businesswoman. The subtenant claimed that about
three months after receiving that letter, the sublandlord "and
others arrived at the premises and forcibly removed" the subtenant
from the store and discarded certain of her property.
Park v. Timber Creek Plaza, LLC 02-4929 (U.S. Dist. Ct. D. N.J. 2005)
(Unpublished) February 22, 2005 The subtenant alleged that the
sublandlord deprived her of her property without due process of law in
violation of the 14th Amendment of the Constitution. The District Court
dismissed that claim since "deprivation of property without due
process of law requires a showing of state action and the subtenant
failed to show that the sublandlord had exercised power "possessed
by virtue of state law and made possible only because the wrongdoer
[was] clothed with authority of state law."
The Court held that, in New Jersey, in order to recover under a claim of
forcible entry and detainment of property, the claimant must make a
showing of legal actual possession at the time of entry... as well as a
showing of legal entitlement to actual possession - although title to
the property is not required. The sublandlord argued that the subtenant
was not legally entitled to possession of the premises since she was not
a named party to any contractual agreement found in [the] record and
since she subleased the premises without the sublandlord's knowledge
or consent, thereby violating the terms of the original sublease between
the sublandlord and the businesswoman, thereby voiding the
businesswoman's sublease agreement with the subtenant. The Court
rejected this argument, finding that the businesswoman's
"failure to secure the permission of [the sublandlord] prior to
subleasing the premises would not by itself void that agreement"
since it is generally accepted that lessees may transfer their leases
despite restrictions in the lease against doing so.
Thus, the Court held that any sublease agreement entered into by [the
businesswoman] was not void ... for failure to obtain the
sublessor's consent. Additionally, the Court found that a dismissal
of the subtenant's claim would be improper since a reasonable jury
could conclude, based on the facts ... that [the subtenant] was in
actual legal possession of the premises on the date of the alleged
incident.
This conclusion was supported by the fact that the sublandlord entered
into a second sublease with the businesswoman in what appeared to be an
effort to circumvent the subtenant's entitlement to the premises
after the sublandlord and the businesswoman entered into their sublease
agreement. The Court likewise rejected the sublandlord's contention
that an unwritten commercial sublease is void since the rule had since
been changed. Finally, the Court held that since each party gave
dissimilar accounts of what had occurred, it was more proper for a jury
to resolve those factual disputes.
The subtenant sought damages for wrongful distraint, which the Court
referred to as the `seizure of another's property to secure the
performance of a duty, such as payment of overdue rent.'
The sublandlord argued that the Court had no evidence that the subtenant
owned any of the property distrained and, thus, [was] not entitled to
any damages. The Court agreed and dismissed the subtenant's
conversion, trover, and wrongful distraint claims since her evidence on
the issue of ownership was a mere scintilla and [was] not significantly
probative." for more information see:
www.houstonrealtyadvisors.net
www.houstonrealtyadvisors.net
lease, does not by itself void a subleasing since it is generally
accepted that lessees may transfer their leases despite restrictions in
their lease against doing so.
from http://www2.blogger.com/www.meislik.com <http://www.meislik.com/>
A subsubtenant sued its sublandlord, seeking damages and the return of
her property after the sublandlord allegedly forcibly removed [the
subsubtenant] from, and took possession of, her massage therapy
business. The sublandlord sought to have the suit dismissed.
Originally, a businesswoman had bought the sublandlord's massage
business and then subleased the premises. Those premises had been
leased by the sublandlord from a real-estate company. The record did
not show whether the sublandlord needed the owner's permission
before making the sublease agreement. The businesswoman then resold the
massage business to the subtenant who thereafter took possession of the
premises, [and] began renovations and conducted business therein.
The sublandlord claimed that the subtenant took possession of the
premises without her knowledge, and the businesswoman's husband
admitted that he sold the business to the subtenant without the
sublandlord's consent or knowledge. Thereafter, the subtenant
claimed that she paid rent directly to the lessor. Later, the subtenant
and the businesswoman each received a letter from the sublandlord
purporting to terminate the original sublease agreement between the
sublandlord and the businesswoman. The subtenant claimed that about
three months after receiving that letter, the sublandlord "and
others arrived at the premises and forcibly removed" the subtenant
from the store and discarded certain of her property.
Park v. Timber Creek Plaza, LLC 02-4929 (U.S. Dist. Ct. D. N.J. 2005)
(Unpublished) February 22, 2005 The subtenant alleged that the
sublandlord deprived her of her property without due process of law in
violation of the 14th Amendment of the Constitution. The District Court
dismissed that claim since "deprivation of property without due
process of law requires a showing of state action and the subtenant
failed to show that the sublandlord had exercised power "possessed
by virtue of state law and made possible only because the wrongdoer
[was] clothed with authority of state law."
The Court held that, in New Jersey, in order to recover under a claim of
forcible entry and detainment of property, the claimant must make a
showing of legal actual possession at the time of entry... as well as a
showing of legal entitlement to actual possession - although title to
the property is not required. The sublandlord argued that the subtenant
was not legally entitled to possession of the premises since she was not
a named party to any contractual agreement found in [the] record and
since she subleased the premises without the sublandlord's knowledge
or consent, thereby violating the terms of the original sublease between
the sublandlord and the businesswoman, thereby voiding the
businesswoman's sublease agreement with the subtenant. The Court
rejected this argument, finding that the businesswoman's
"failure to secure the permission of [the sublandlord] prior to
subleasing the premises would not by itself void that agreement"
since it is generally accepted that lessees may transfer their leases
despite restrictions in the lease against doing so.
Thus, the Court held that any sublease agreement entered into by [the
businesswoman] was not void ... for failure to obtain the
sublessor's consent. Additionally, the Court found that a dismissal
of the subtenant's claim would be improper since a reasonable jury
could conclude, based on the facts ... that [the subtenant] was in
actual legal possession of the premises on the date of the alleged
incident.
This conclusion was supported by the fact that the sublandlord entered
into a second sublease with the businesswoman in what appeared to be an
effort to circumvent the subtenant's entitlement to the premises
after the sublandlord and the businesswoman entered into their sublease
agreement. The Court likewise rejected the sublandlord's contention
that an unwritten commercial sublease is void since the rule had since
been changed. Finally, the Court held that since each party gave
dissimilar accounts of what had occurred, it was more proper for a jury
to resolve those factual disputes.
The subtenant sought damages for wrongful distraint, which the Court
referred to as the `seizure of another's property to secure the
performance of a duty, such as payment of overdue rent.'
The sublandlord argued that the Court had no evidence that the subtenant
owned any of the property distrained and, thus, [was] not entitled to
any damages. The Court agreed and dismissed the subtenant's
conversion, trover, and wrongful distraint claims since her evidence on
the issue of ownership was a mere scintilla and [was] not significantly
probative." for more information see:
www.houstonrealtyadvisors.net
www.houstonrealtyadvisors.net
Friday, March 23, 2007
Square footage certification
"Any bozo who can hold a tape measure can measure square footage."
from Lease Audits: The Essential Guide
"This text will assume that the goal of measuring square footage is to achieve an accurate result which is objectively verifiable and which complies with law or standards for measurement as applicable to the lease in question.
The trick is to measure the premises to the same supportable number twice in a row. An even better trick is to measure, arrive at a sum, and then tell another person how you measured it - such that he can do so without further coaching and come up with the same sum. The final coup de grace is to measure the space accurately such that it can be remeasured to the same sum while following instructions which are legally supportable as the proper way to measure space under the lease applicable to those circumstances.
Either of 3 possibilities may permit the motivate novice to attempt to measure a given leased premises:
(1) Blithe ignorance coupled with overconfidence;
(2) Care, study, and innate aptitude; or
(3) Extreme simplicity of premises to be measured.
Issues which are important include each of the following:
A. Whether certified numbers are based upon as-built measurements which are essential to reliable accuracy.
B. The certification must be based upon a configuration of exterior walls, both of the building and of the suite, which exists at a time relevant to the analysis.
C. The certification should state the underlying basis of the measurement, often that it is in accordance with a stated standard - be it BOMA or some other standard which is accepted as the appropriate one for the particular premises at issue.
D. Require that the certification be directed to the tenant who relies upon it so that the person performing the certification knows that tenant is relying upon it." for more information see ; www.houstonrealtyadvisors.net
from Lease Audits: The Essential Guide
"This text will assume that the goal of measuring square footage is to achieve an accurate result which is objectively verifiable and which complies with law or standards for measurement as applicable to the lease in question.
The trick is to measure the premises to the same supportable number twice in a row. An even better trick is to measure, arrive at a sum, and then tell another person how you measured it - such that he can do so without further coaching and come up with the same sum. The final coup de grace is to measure the space accurately such that it can be remeasured to the same sum while following instructions which are legally supportable as the proper way to measure space under the lease applicable to those circumstances.
Either of 3 possibilities may permit the motivate novice to attempt to measure a given leased premises:
(1) Blithe ignorance coupled with overconfidence;
(2) Care, study, and innate aptitude; or
(3) Extreme simplicity of premises to be measured.
Issues which are important include each of the following:
A. Whether certified numbers are based upon as-built measurements which are essential to reliable accuracy.
B. The certification must be based upon a configuration of exterior walls, both of the building and of the suite, which exists at a time relevant to the analysis.
C. The certification should state the underlying basis of the measurement, often that it is in accordance with a stated standard - be it BOMA or some other standard which is accepted as the appropriate one for the particular premises at issue.
D. Require that the certification be directed to the tenant who relies upon it so that the person performing the certification knows that tenant is relying upon it." for more information see ; www.houstonrealtyadvisors.net
Thursday, March 22, 2007
Uncertainty as renewal notice deadline approaches
Avoid uncertainty as renewal notice deadline approaches
When a landlord gives a tenant a renewal option, typically the landlord requires the tenant to notify the landlord of its intent to exercise this option by a certain deadline.
"The landlord may think that if the tenant misses this deadline, it loses the right to exercise the renewal option. But that's not always true. Some state courts may rule that if a tenant misses the renewal notice deadline because of, for example, an oversight, the landlord must still honor its late renewal notice.
So what does a landlord do if a tenant's renewal notice deadline is rapidly approaching and the tenant has not given its renewal notice?
Landlords may be wary about starting negotiations with a replacement tenant until they are sure that the current tenant is not planning to renew its lease.
To avoid this problem, some landlords send certain tenants a letter reminding them of the upcoming renewal option deadline, and stressing that a late notice will not be honored. The landlord will not want to send a renewal option a letter reminding it of its upcoming renewal notice deadline to every tenant with a renewal option Deciding when to send such a letter will depend in large part on what your state's position is on late renewal notices and the enforcement of time is of the essence clauses.
Most states' courts have followed the view that an owner should be compelled to honor a late renewal notice only under very limited circumstances, such as when the failure to serve notice on time was caused by fraud, duress, undue influence, misrepresentation, or mistake.
A handful of states may require owners to honor a tenant's late renewal notice if the owner was not prejudiced. Courts in these states typically weight the following 4 factors when deciding whether an owner must honor a tenant's late renewal notice:
(1) Reason for failure to give timely notice – whether the
reason for the late notice was due to an honest and justifiable mistake;
(2) The length of tenant's delay – whether the tenant
gave its notice only a few days late or months late;
(3) Prejudice suffered by owner – whether the late notice
prejudiced the landlord because it wasted money marketing the space or negotiating a new lease with a replacement tenant; and
(4) Hardship suffered by tenant – whether the tenant will
be hurt if the landlord does not honor the late renewal notice, e.g.
tenant won't recoup substantial cost of its improvements."
for more information see www.houstonrealtyadvisors.net
from Professional Building Office Management, June 2004
When a landlord gives a tenant a renewal option, typically the landlord requires the tenant to notify the landlord of its intent to exercise this option by a certain deadline.
"The landlord may think that if the tenant misses this deadline, it loses the right to exercise the renewal option. But that's not always true. Some state courts may rule that if a tenant misses the renewal notice deadline because of, for example, an oversight, the landlord must still honor its late renewal notice.
So what does a landlord do if a tenant's renewal notice deadline is rapidly approaching and the tenant has not given its renewal notice?
Landlords may be wary about starting negotiations with a replacement tenant until they are sure that the current tenant is not planning to renew its lease.
To avoid this problem, some landlords send certain tenants a letter reminding them of the upcoming renewal option deadline, and stressing that a late notice will not be honored. The landlord will not want to send a renewal option a letter reminding it of its upcoming renewal notice deadline to every tenant with a renewal option Deciding when to send such a letter will depend in large part on what your state's position is on late renewal notices and the enforcement of time is of the essence clauses.
Most states' courts have followed the view that an owner should be compelled to honor a late renewal notice only under very limited circumstances, such as when the failure to serve notice on time was caused by fraud, duress, undue influence, misrepresentation, or mistake.
A handful of states may require owners to honor a tenant's late renewal notice if the owner was not prejudiced. Courts in these states typically weight the following 4 factors when deciding whether an owner must honor a tenant's late renewal notice:
(1) Reason for failure to give timely notice – whether the
reason for the late notice was due to an honest and justifiable mistake;
(2) The length of tenant's delay – whether the tenant
gave its notice only a few days late or months late;
(3) Prejudice suffered by owner – whether the late notice
prejudiced the landlord because it wasted money marketing the space or negotiating a new lease with a replacement tenant; and
(4) Hardship suffered by tenant – whether the tenant will
be hurt if the landlord does not honor the late renewal notice, e.g.
tenant won't recoup substantial cost of its improvements."
for more information see www.houstonrealtyadvisors.net
from Professional Building Office Management, June 2004
Tuesday, March 20, 2007
Renewal Tips when the time comes
Follow 11 tips when negotiating renewal near lease end.
"Like many other tenants, you may have signed a lease without a renewal option. A renewal option may not have been important to you when you negotiated the lease because you didn't anticipate staying in the space beyond the initial term. Or the owner may have refused to give you a renewal option when you negotiated the lease.
Renewing the lease can be a golden opportunity to get a better deal from the owner, especially if the tenant has proven itself as a good tenant, or the real estate market (from the owner's perspective) is weak.
Follow these 11 negotiating tips if you want to renew a lease that does not already have a renewal option:
(1) Start renewal negotiations early.
(2) Prepare for negotiations by researching market.
(3) Don't accept owner's first renewal rent
figure.
(4) Ask for Operating Expense/CAM cost exclusions or cap.
(5) Don't let owner take away key concessions.
(6) Consider changes in neighborhood/market when setting
renewal term.
(7) Don't let owner factor TIA (tenant improvement
allowance) repayment into base renewal rate.
(8) Use renewal negotiations as opportunity to fix lease
problems.
(9) Apply security deposit toward base renewal rent.
(10) Don't agree to do building upgrades during renewal
term.
(11) Be willing to leave space behind."
for more information see: www.houstonrealtyadvisors.net
Ed A. Ayres 713-782-0260
"Like many other tenants, you may have signed a lease without a renewal option. A renewal option may not have been important to you when you negotiated the lease because you didn't anticipate staying in the space beyond the initial term. Or the owner may have refused to give you a renewal option when you negotiated the lease.
Renewing the lease can be a golden opportunity to get a better deal from the owner, especially if the tenant has proven itself as a good tenant, or the real estate market (from the owner's perspective) is weak.
Follow these 11 negotiating tips if you want to renew a lease that does not already have a renewal option:
(1) Start renewal negotiations early.
(2) Prepare for negotiations by researching market.
(3) Don't accept owner's first renewal rent
figure.
(4) Ask for Operating Expense/CAM cost exclusions or cap.
(5) Don't let owner take away key concessions.
(6) Consider changes in neighborhood/market when setting
renewal term.
(7) Don't let owner factor TIA (tenant improvement
allowance) repayment into base renewal rate.
(8) Use renewal negotiations as opportunity to fix lease
problems.
(9) Apply security deposit toward base renewal rent.
(10) Don't agree to do building upgrades during renewal
term.
(11) Be willing to leave space behind."
for more information see: www.houstonrealtyadvisors.net
Ed A. Ayres 713-782-0260
Houston Premium Outlets breaks ground
CONSTRUCTION BEGINS ON 75-ACRE RETAIL OUTLET CENTERHOUSTON — Construction has begun on Houston Premium Outlets, a 75-acre retail outlet center located in Houston. Chelsea Property Group recently acquired 179 acres located along Highway 290 between Mason Road and Fairfield Place Drive for the development of the project. Houston Premium Outlets will be the first Chelsea Premium Outlet Center in Houston and it is scheduled to open in spring 2008. The project will be located in close proximity to Fairfield Town Center, a 100-acre retail project that is scheduled to open in fall 2008/spring 2009.
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