Commercial Real Estate: Your Broker and Your Attorney Both Play Important Roles

Our fircollaboration-imagem handles commercial real estate transactions of all kinds: Acquisitions, Sales, Commercial Leases, you name it. Most of our work is referred to us by commercial real estate brokers we’ve worked with in the past or who have been referred to us by those familiar with our firm. Our relationships with brokers are some of our most valued and we welcome the opportunity to work with knowledgeable and dedicated brokers to provide the best service and value to our mutual client, whether they are a buyer or seller of commercial real estate, a commercial landlord or tenant, or a developer. We believe that the broker and the attorney, working as a team, are key to a successful transaction.

Successful teamwork occurs when there is good communication between the parties involved: the client, the broker, and the attorney, on the one hand, and the opposing party, their broker, and their attorney, on the other. Working together, the broker and attorney bring different strengths and perspectives to the transaction and each plays an important role in guiding the client to a successful outcome.

For example, an experienced and active broker knows the real estate market, knows the value and details of the subject property, and knows the relative bargaining power of each party. He or she can bring that information to bear in negotiations and in communications with the other party and their broker to structure the best deal possible for the client.

An experienced and knowledgeable attorney knows the law as it pertains to the transaction, title matters and land use issues, knows how to draft contracts, closing documents and leases to the benefit of the client, and knows how to resolve disputes or work through problematic legal issues with opposing counsel in order to keep the deal moving forward. While the broker works to negotiate and structure the best deal possible, the attorney works to make sure the transaction is properly executed and documented to accurately reflect the agreement between the parties.

The most successful deals result from a collaborative effort between your attorney and your broker, both of whom should be focused on your needs and goals and on working together to achieve them. Not only do we appreciate our relationships with all our clients, but we also greatly appreciate our relationships with commercial real estate brokers and place great value on the important role they play in accomplishing the client’s goals.

As always, thanks for reading! BH

New Firm! New Home! New Stuff!

Hello! After about a year-long OLFbreak from blogging, I’m back at the keyboard. All is good! I joined a new law firm, The Ort Law Firm, last July. We’re housed in the (awesome) Britt Mansion in beautiful Winter Garden, Florida! I am really loving the firm, the town, the work and the laid-back office culture. Four attorneys, four paralegals and an administrator make nine of us altogether in the office. Though we are small, we are fierce! We have great clients and, for a small firm, we are doing some complex work and large deals. We are focused solely on commercial and residential real estate: transactions, leases, title insurance, development, finance, real estate-related litigation and much more.

I am loving Winter Garden and hope to move here soon. I am looking forward to immersing myself this quaint, health-oriented, walkable (and golf cart-able!) community. Also really looking forward to cycling on the West Orange Trail often and taking full advantage of all the local food and drink establishments (such as Plant Street Market and the Crooked Can Brewery) on and around Plant Street! I’ll certainly  miss Winter Park, where I’ve lived for 16 years, but both WP and my friends who live there are still close by.

I hope to pick back up where I left off on this site, providing useful information about Florida real estate law and real estate news and, once in a while, a random post here or there about leadership, motivation and anything else I like, just for my own entertainment if nothing else.

Thanks for visiting the site! Return often!  BH

2015 Is The Year For Commercial Leasing, Apparently

Retail Space AvailableAt least, it has been for me so far. I have been doing a lot of tenant representation so far this year … reviewing and negotiating commercial leases. For some reason my transactional work (loan closings, purchase/sale closings, etc.) has been lagging since the end of 2014, and I’m not sure whether it’s a trend for real estate in general or is specific to my clients and my practice. In any event, the commercial leasing work has helped take up the slack and I enjoy the work and the clients for whom I do it. Generally, it’s fast-paced work … once an LOI has been agreed to both parties want the lease negotiated and executed as soon as possible: the tenant, because they want to get in, get their tenant improvements installed and get revenue flowing in as quickly as possible, and the landlord, because they want the rent to start flowing in as quickly as possible. That sometimes puts stress on the attorney(s) involved because we’re called upon to do our our work in short order, often with the client or their broker in our ear continually asking (or repeatedly emailing) “have you gotten to that lease, yet?” That, in turn, requires an experienced practitioner who is skilled at focusing on the most important issues to his client and is discerning enough not to waste time haggling over terms that aren’t material or that, even if they are material, are very, very unlikely to be changed by the landlord even if objected to. I am glad to have several tenant clients with whom I’ve worked long enough, and for whom I have negotiated enough leases, that I know what is important to them. It is one of the (few, perhaps?) pleasures of this demanding profession to have long-standing clients who trust you and are appreciative of your work and with whom you are knowledgeable enough to know what is important to them and what is a waste of their time and money.  If you need an attorney like that, I know where you can find one!  BH

Florida Trend Legal Elite 2015

Florida Trend Legal Elite 2015 voting is open! Florida attorneys vote here: http://www.newlinks.com/elite15/

Expect Nothing Appreciate Everything

“I’m waiting for …” What? Why? Don’t wait! Do something!

I saw the post below online this morning and it reminded me of one of those “lessons learned.” As a young associate I once started a response to a senior attorney (who wanted an update on the status of an important matter) with “I’m waiting for ….” That’s far as I got! “Why? Why are you waiting? Pick up the phone and call him. Get it done. GO.”

Whoa. My first reaction was “What a jerk!” And, frankly, he was. THEN, however, I realized the reason I was waiting was because I was intimidated at the prospect of calling the attorney on the other side. I was stalling because of my own insecurity. And there was no reason for it! He’d made his point.

Lesson learned: Whenever you find yourself starting a sentence with “I’m waiting for …,” take a second and think about whether you should be waiting for anything at all or whether, instead, you should take control and make something happen! More often than not that is the better choice!

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Good News Keeps Coming …

good-newsWow. I think the (seemingly mythical) “turnaround” in the commercial real estate market is actually going to stick this time! After many years of up and down and sideways market conditions, GOOD news about the Orlando/Orange County/Central Florida commercial real estate market is being consistently observed and reported. For example, see this article entitled “9 things that may surprise you about Orange County real estate” by Anjali Fluker, writer for the Orlando Business Journal. Local market indicators are the best they’ve been in at least 5 years, new construction and new commercial activity is booming throughout the area (have you seen the construction (and traffic) on International Drive lately? It’s insane!) and deals are being made! Here in Winter Park things are very active along the 17-92/Lee Road/Denning Drive corridors, which I think is fantastic. I WILL be checking out the new Trader Joe’s on 17-92 as soon as it opens! On a larger scale, my clients who attended the recent ReCon/ICSC convention in Las Vegas came back with pleasantly optimistic reports. Sure, everyone in real estate has been burned enough the past several years that they remain at least slightly wary, but that’s good business judgment in all market conditions and is also healthy for the industry. Nobody I know wants another real estate “bubble” to blow up in our faces. But, despite all the false starts and cautionary tales of the past few years, we finally seem to be in the midst of a consistent, upwardly trending, pattern of recovery. Thankfully, it feels good to read the commercial real estate news again, in the OBJ Commercial Real Estate News and other publications.

Too Busy To Blog! But that’s no excuse …

writing-life-300x200Sorry for my absence, lately! I understand now what marketing professionals mean when they tell me that the key to a successful blog is consistency, as in consistently providing new, meaningful content on a regular basis. Trust me, it’s a really hard thing to do, especially if you demand to personally write all of your own material, as I do. If I don’t write it myself I just don’t “feel” it, it’s not “me”, and that’s not the type of blog I want mine to be.

Unfortunately, the result is that I sometimes fall into the predictable pattern of many bloggers, which goes like this: (1) I find myself not as busy as I’d like to be or I’m busy with pretty mundane or unprofitable work; (2) I write articles to fill in any time gaps I may have, hoping to build business and find meaningful, profitable work; (3) I get busier with good work and feel (almost always wrongly) that I don’t have time for anything else; (4) I neglect to write articles because I’m so busy; (5) Suddenly, I finish a project or wrap up a big closing and realize I’m once again not as busy as I’d like to be; and (6) It occurs to me that I haven’t written an article in a long time and I think “Hey, I really need to write an article.” But it is SO hard to get those wheels turning again once they’ve stopped.

Successful blogging is very much like exercise. To get the greatest benefit one must exercise consistently and regularly because once you slow down or stop, it is 10 times harder to get going again. Same with the blog. Once I’ve slowed down or stopped, getting started again is akin to starting all over again with the proverbial “blank sheet of paper” that just stares back at you while all the great ideas for articles you used to have seem to have just evaporated.

Well, I’m back now and away we go. I’ll try to do better. The good news is that as I write this I am actually pretty busy. The commercial real estate market is clearly heating up, if not to the “hot as the sun” levels of the bubble years 5 or 6 years ago, at least to a nice, steady simmer, and maybe even a gentle boil. New buildings and shopping centers are going up all around the Central Florida area, and I have been working on quite a few commercial leases, purchase and sale transactions, and loan closings, but of course could always do more! Just down the street (17-92 in Winter Park) the new Trader Joe’s is going up fast, as is the new ABC Fine Wine & Spirits across from Winter Park Village, and it looks fantastic. Other parts of the Metro-Orlando area appear to be just as busy. Clients of mine who are commercial tenants report that they are having a more difficult time finding available space and shopping center owners are actively shopping for new centers. All of this bodes well for Central Florida’s economy and I’m glad to see things picking up.

Remember, if you are involved in commercial real estate, buying, selling, leasing or financing, get an experienced commercial real estate attorney (I hope it’s me!) involved early in the transaction. If you’re leasing, have your lease reviewed before you sign it. If you’re buying, have your contract reviewed before you sign it. Hopefully, we’ll all be busy with meaningful, profitable work for a long time to come AND I’ll do a better job of adding new, interesting content to the blog at the same time. And exercising. Mustn’t forget to exercise.

Thanks for reading!

BH

How Do You Define Confidence? Here’s One Way …

ConfidenceSaw this on the internet the other day and it rang true to me. For me, one way of defining confidence as an attorney is being able to respond to a client’s question by admitting, without any shame, “I don’t know … ” but being able to ‘confidently’ add “however, I can get that answer for you.” I recall an instance when, as a young associate at a large firm, I whined to my supervising partner, “You never explain anything to me. I feel like I’m always trying to figure everything out.” He looked at me, perplexed and a little annoyed, and said, “We’re ALL just trying to figure everything out.”

Lesson learned. NOBODY has all the answers.

When hiring an attorney don’t be dissuaded by one who says “I don’t know.” Instead, if he or she has the other characteristics you’re looking for … solid reputation, significant experience, strong work ethic, a personality you’re comfortable with … be encouraged by their willingness to be open and honest and rely on their determination to doggedly pursue the answer. Remember, the “law”, like the “internet”, is a massive thing. Nobody knows it all. BH

LLCs: GOT ONE? NEED ONE? LOANING MONEY TO ONE? Pay attention to these new rules!

PayAttentionThe new Florida Revised Limited Liability Company Act (the “New Act”) became effective January 1, 2014. If you have an existing LLC, are forming a new LLC or, for you commercial lenders out there, are loaning money to an LLC, you should pay attention to the changes that have been implemented.

Why bother with a New Act?

Theoretically, the New Act is intended to make Florida a more attractive state in which to form an LLC by making the rules here more consistent with those of other states, with other Florida business entity statutes and with court decisions clarifying the intent and effect of the Florida statutes applicable to LLCs.

Whatever. Why do “I” need to know this?

Well, this is starting out just peachy, isn’t it? LLCs have been by far the most common ‘corporate’ vehicle over the past couple of decades by which investors and business owners have avoided personal liability for claims involving their properties and businesses. They are easy to form, easy to operate and have relatively little cost and administration involved while still protecting their owners from personal liability. Heck, it’s almost the only entity we form in our office any more. However, as a relatively new type of entity, LLCs haven’t had the extensive vetting over time as have corporations, partnerships, limited partnerships and other more time-tested entities. But, enough time has passed now for lots of LLCs to have been organized, dissolved, sued, challenged, bankrupted, bought, sold and so on that the original rules are now being refined and updated to be more consistent with those activities and decisions. Odds are, if you formed a business or bought commercial property using an entity in the last 15 to 20 years, you did it via an LLC. So you need to know the rules.

Ok. Fine. God this stuff is boring. What’s changed? And keep it brief.

Hmmph. Well, for LLC owners, for one thing, you shouldn’t be calling yourself a “Managing Manager” any more. You’re either a “Member” or a “Manager.” The New Act does away with the concept of a managing member. That’s been one of my personal pet peeves in the past, in part because the online forms on Sunbiz that people use to form LLCs themselves seems to encourage the use of the title “Managing Member” no matter whether the LLC is intended as “Member-Managed” or “Manager-Managed” LLC. Legally, that creates confusion (at least in my mind) because by statute LLCs must either be Member-Managed or Manager-Managed. The New Act says if you call yourself a “Managing-Member” then you are deemed to be a Member that is managing a Member-Managed LLC. The difference? If your LLC is a Member-Managed LLC, you may be creating voting rights and management authority in other members of the LLC, intended or not. Clearly define your LLC as either “Member-Managed” or “Manager-Managed” to avoid unintended consequences.

That took way too long and was way too confusing and I’m tired of reading this crap. What else? In bullet form, please.

OK, OK! Geez …

–        Operating Agreements: I just want to say, most importantly, that the role of the LLC Operating Agreement remains critical. If you are forming an LLC, have a solid, written Operating Agreement! Always recommended and the New Act hasn’t changed that. The New Act (like the Old Act) only specifies certain rules that govern the LLC in the absence of an Operating Agreement. For clarity, have an Operating Agreement. Lenders, demand a copy of your LLC Borrower’s Operating Agreement and review it carefully. That’s your road map to avoiding mistakes!

 –        Other Stuff: The New Act contains other changes related to the dissociation of a member, the exchange of membership interests, assignment of a member’s “transferrable interest” (i.e. the right to receive distributions but not including any voting or managerial rights,) the ability to have non-economic members (members that have the right to vote, but have neither an obligation to contribute, nor a right to receive distributions of, capital) and service of process. I’ll spare you the details because I can tell you’re getting drowsy.

–        Lenders: See “Operating Agreements” above. Review the Operating Agreements of your borrowers! Only then will you know the proper affidavits, consents and resolutions that are required to comply with the LLCs governing documents. Remember, the Florida Statutes provide that the CEO, President or Vice-President of corporation can sign documents and bind the corporation and you are entitled to rely on that statute as ensuring your loan documents are enforceable against the corporation. However, there is no corresponding statute that does exactly that for an LLC. You MUST review the Operating Agreement.

Dang. Lost you, didn’t I?

Your eyes have glazed over and you’re semi-comatose. Hey, some of us find this stuff (semi-) interesting! In CONCLUSION, if any of these issues might affect your LLC or your lending practices consult your attorney! If you’re an LLC owner, it may be a good idea to have your existing Operating Agreement reviewed by your attorney (hey, maybe that’s me!) in order to identify any potential issues and to update it to be consistent with the New Act. If you’re a commercial lender, it may be a good idea to have your attorney (hey, maybe that’s me!) review your lending/loan closing practices to make sure you are abiding by the governing documents of the entities to which you make loans to make sure you aren’t making mistakes that could jeopardizing the enforceability of your loan documents and, potentially, your security interest.

I’ll stop now. Have a nice nap. But thanks for reading!

BH

Two Words On “Attitude” …

Captain Jack Sparrow, channeling Charles R. Swindoll …

Captain Jack Sparrow - AttitudeThe longer I live, the more I realize the impact of attitude on life. Attitude, to me, is more important than facts. It is more important than the past, than education, than money, than circumstances, than failure, than successes, than what other people think or say or do. It is more important than appearance, giftedness or skill. It will make or break a company … a church … a home. The remarkable thing is we have a choice everyday regarding the attitude we will embrace for that day. We cannot change our past … we cannot change the fact that people will act in a certain way. We cannot change the inevitable. The only thing we can do is play on the one string we have, and that is our attitude. I am convinced that life is 10% what happens to me and 90% of how I react to it. And so it is with you … we are in charge of our Attitudes.  Charles R. Swindoll