Real Estate - Commercial Real Estate
Our primary real estate practice involves commercial real estate transactions. These financial times offer unique opportunities for clients in a position to purchase real estate. In addition, there are many areas within the boroughs of the City of New York, in which apartment buildings, hotels, warehouses and other commercial real estate and land are in high demand. In these instances, clients are often faced with the prospect of substantial capital gains tax. Our firm often uses a 1031 tax exchange to forestall potential gains tax.
1031 Exchange – A 1031 Exchange allows a client to sell an appreciated piece of investment property (or enter a long-term lease), in exchange for their purchase or long-term lease of another piece of investment property in the future. These transactions offer significant financial benefits to clients seeking to acquire other properties after the sale of an existing property.
Leases – Another aspect of our real estate practice involves lease preparation, negotiation, and litigation. Leases must be drafted in order to avoid any misinterpretation. This will enable the parties to readily identify non-performance by the other party. Many of our client’s leases involve, master leases, in which an entire premises is rented for a long period of time, and subleased by the tenant entering the agreement. In all leases, insurance, risk management and indemnification are particularly relevant, especially considering environmental issues that can create significant financial exposure. We use our extensive experience in order to draft leases that are unambiguous and enforceable, and which protect our clients from potential risk.
Real Estate and Estates – In areas where commercial real estate values have dropped, this can offer a unique opportunity to a client seeking to transfer properties as part of Estate Planning. A lower real estate value allows a client to take further advantage of Marketability/Minority Discounts, often through the use of Family Limited Partnerships, in an effort to reduce or eliminate potential estate taxes.
A Sample Case involving a Real Estate Transaction: It is not unusual for issues and disputes to arise when dealing in any real estate transactions. Typically these are resolved amicably between the parties. More often than not, escrow accounts (in which the attorneys hold funds aside) are established to insure performance under the agreements between the parties. Once in a while a dispute arises that cannot be resolved. In such cases a decision by the Court is required in order to release funds held in escrow to the aggrieved party to the transaction. In one case, we represented the corporate seller of a multi-million dollar commercial building, in which a six figure escrow was established to insure the buyer’s performance. When the buyer failed to show up for the closing, our office obtained a Court Order authorizing us to release the six figure escrow to our client. The buyers later sued our client for damages. The result was that our client was permitted to retain the escrow deposit, and the buyer’s lawsuit was dismissed. New York State Supreme Court, Queens County, Index No. 017358/207, New York State Supreme Court, Queens County, Index No 01910208