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Riaoc Speach42109

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Selected Issues of Importance to Commercial Real Estate Brokers, Property Managers and Owners in a Down Economy

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Riaoc Speach42109

  1. 1. Presented to the RIAOC Orange County April 21, 2009 4/21/2009 Howard F. Kline, Esq. (949) 888-7708 1
  2. 2. TRUST DEED GUARANTOR  LIABILITIES NEGOTIATING TERMS WITH DEEP  POCKET TENANTS SUBORDINATION, ATTORNMENT &  NON-DISTURBMENT LEASE PROVISIONS LANDLORD BANKRUPTCY EFFECT  4/21/2009 Howard F. Kline, Esq. (949) 888-7708 2
  3. 3. Early to mid 90’s  Changing economic conditions  Not limited to real estate  Not limited to residential real estate  Stagflation  Prices going up  People spending less  Retail downturn  Overleveraged property  4/21/2009 Howard F. Kline, Esq. (949) 888-7708 3
  4. 4. Prevalence of ownership in LLC;  Non-Recourse Loans  Guarantees of principals of LLC  Limited or unlimited  Non-Judicial Foreclosure  Anti-Deficiency Rules  Judicial Foreclosure  Fraud  Deficiency  Receivership  4/21/2009 Howard F. Kline, Esq. (949) 888-7708 4
  5. 5. Recession Proof Tenants  Fast Food   Discount Retail  Co-Tenancy Provisions  Landlord Financials  Marketing Provisions  Previously second tier tenants  Long Term Leases with Tenant’s right to terminate early   Long Term Protections from Foreclosure Franchisee Leases  Purchase as an option  4/21/2009 Howard F. Kline, Esq. (949) 888-7708 5
  6. 6. Paragraph 30 of Win AIR Multi-Tenant Gross  Lease More significant in slowing or weakening  economy Foreclosures   Tenant or subtenant may lose rights to long term lease!!!!!!!  Modifiable 4/21/2009 Howard F. Kline, Esq. (949) 88-7708 6
  7. 7. Delay Foreclosure  May terminate unwanted leases,  notwithstanding attornment provisions Landlord may assume or reject executory leases  Should not be a concern to tenant unless a long term,  very favorable tenant lease; Tenant must still perform unless lease has been  rejected Brokers better collect commissions early  Secure commissions if delayed – Good luck  4/21/2009 Howard F. Kline, Esq. (949) 888-7708 7
  8. 8. Tenants  Lease Terminations?  Stave off foreclosure  Brokers  Get paid as soon as possible  Can record commission obligation as a lien on  property – Good Luck Property Managers  Recession Proof  4/21/2009 Howard F. Kline, Esq. (949) 888-7708 8
  9. 9. Any Thoughts?  4/21/2009 Howard F. Kline, Esq. (949) 888-7708 9
  10. 10. Howard F. Kline, Esq.  949.888.7708  949.767.5611 Facsimile  hfk@hfklegal.com  hfk@hfkesq.com  hfklaw@cox.net   Linkedin Profile:  http://www.linkedin.com/in/howardkline  Commercial Real Estate Herald  Blawg: http://ocrealestate.blogs.com/commercialpro pertyherald/ 4/21/2009 Howard F. Kline, Esq. (949) 309-2394 10
  11. 11. 4/21/2009 Howard F. Kline, Esq. (949) 888-7708 11

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