Alternative Financing Structures for Real Estate Deals

140 Pages·2009·7.16 MB·English

Alternative Financing Structures for
Real Estate Deals
Leveraging New Opportunities and Minimizing Legal Risks With
presents
Sale-Leasebacks, Seller Financing and Ground Leases
A Live 90-Minute Teleconference/Webinar with Interactive Q&A
Today's panel features:
Thomas C. Homburger, Partner, K&L Gates, Chicago
Jeffrey A. Usow, Partner, Mayer Brown, Chicago
Jade E. Newburn, Mayer Brown, Chicago
Thursday, October 8, 2009
The conference begins at:
1 pm Eastern
12 pm Central
11 am Mountain
10 am Pacific
The audio portion of this conference will be accessible by telephone only. Please refer to the dial in instructions emailed to registrants
to access the audio portion of the conference.
CLICK ON EACH FILE IN THE LEFT HAND COLUMN TO SEE INDIVIDUAL PRESENTATIONS.
If no column is present: click Bookmarks or Pages on the left side of the window.
If no icons are present: Click View, select Navigational Panels, and chose either Bookmarks or Pages.
If you need assistance or to register for the audio portion, please call Strafford customer service at 800-926-7926 ext. 10
Alternative Financing 
Structures for Real Estate Deals
Leveraging New Opportunities and 
Minimizing Legal Risks With Sale‐
Leasebacks, Seller Financing and 
Ground Leases
Thomas C. Homburger
K&L Gates
Chicago, IL
Sale and Leaseback Transactions
• Introduction
• Advantages and Disadvantages to Seller-
Tenant
• Advantages and Disadvantages to Buyer-
Landlord
2
Sale and Leaseback Transactions
• Agreement of Purchase and Sale
• Basic Terms of Commitment and/or
Contract
• Equitable Mortgages; Disguised Joint
Ventures
3
Sale and Leaseback Transactions
• The Lease
• Net Lease
• Term of Lease
• Rent
• Insurance and Tenant’s Indemnification
• Rebuilding and Termination
• Condemnation
• Non-Abatement of Rent
• Fixtures and Improvements
• Non-Disturbance, Subordination, and Mortgaging of
Fee and Leasehold
4
Sale and Leaseback Transactions
• The Lease (cont’d)
• Covenant and Quiet Enjoyment
• Assignments and Subleases
• Seller-Tenant’s Repurchase Options
• Buyer-Landlord’s Purchase Options
• Estoppel Certificates
• Maintenance, Repairs and Alterations
• Tenant’s Payment of Taxes and Other Impositions
• Remedies upon Default - Arbitration
5
Sale and Leaseback Transactions
• The Risk of Recharacterization in
Bankruptcy Proceedings
• Bankruptcy Code
• Leases in Bankruptcy
• Loans in Bankruptcy
• Joint Ventures in Bankruptcy
• Effects of Recharacterization
• Relevant Cases
• Preventing Recharacterization
6
Sale and Leaseback Transactions
• Environmental Considerations
• Planning Considerations
• Preparation of Documents
• Environmental Provisions in Lease
7
Alternative Financing Structures for
Real Estate Transactions
Seller Financing
Mayer Brown LLP
October 8, 2009
Jeffrey A. Usow and Jade E. Newburn
Seller Financing
Seller financing may provide a means to bridge the financing gap facing 
commercial real estate buyers and sellers in the near term
• Seller Financing:  A transaction in which the seller of a commercial real 
estate asset makes a secured loan to the buyer to finance a portion of the 
purchase price
• Two common types:
– Traditional mortgage loans secured by a lien on the property
– Mezzanine loans secured by a pledge of ownership interests in the borrowing 
entity
• Contracts for deed, in which the seller conveys title after receiving the 
purchase price over time, are generally not utilized in commercial real estate 
transactions
2