Section 1031 Like-Kind Exchanges – Part 1 of 3

This is the first installment of a three-part series on Section 1031 like-kind exchanges. Part 1 explains WHY you should consider use of a Section 1031 like-kind exchange when selling commercial or investment real property. Part 2 covers the key rules for HOW to implement a Section 1031 like-kind exchange. Part 3 covers special issues applicable to a Section 1031 like-kind exchange when a Tenant-In-Common [TIC] interest is being acquired.

Why Consider a §1031 Like-Kind Exchange?

What if I told you that you could get a hefty 0% interest loan from the federal government to invest in commercial or industrial real estate? Would you be interested?

RSPBetter yet, what if that loan has no fixed monthly, quarterly, or annual repayment obligations and does not show up on your credit report or balance sheet as an outstanding liability?

Still better yet, what if the terms of the loan provide that it may never have to be repaid? Are you interested now?

In effect,* that’s what a Section 1031 like-kind exchange can do for you.

Here’s how:

Section 1031 of the Internal Revenue Code permits Continue reading

PERFECT SELLER – Selling Commercial Real Estate

 Tips on Selling Commercial Real Estate

Sellers are funny people. Not “ha ha” funny, but funny in the sense that they sometimes have an odd way of looking at things when they are selling commercial real estate.

This is not an indictment against any unique class of people. Let’s face it, sooner or later Questions and Answers signpostvirtually all commercial real estate Buyers become commercial real estate Sellers. It is simply a recognition of an odd twist that occurs in the mindset of many commercial real estate investors when the tables are turned and they become Sellers instead of Buyers. If you are selling commercial real estate, or are a listing broker representing a party selling commercial real estate, here’s what you should do. Continue reading

WANTED: REAL ESTATE DEVELOPER

MONEE, ILLINOIS IS IN SEARCH OF A COMMERCIAL REAL ESTATE DEVELOPER – AND WILL PROVIDE ECONOMIC INCENTIVES

This post is intended to serve two purposes:

  1. To give any interested commercial real estate developer a heads up that there is an opportunity in Monee, Illinois to obtain meaningful economic incentives as part of a public-private partnership with the Village of Monee;
  2. To help Monee, Illinois attract the commercial development it wants and needs – including particularly a grocery store.

http://www.dreamstime.com/stock-photos-walking-shopping-center-image29466233Let me first say that I am not a real estate broker or real estate developer, I don’t own land in or near Monee, I don’t represent Monee, and I have no other specific connection to Monee.

WHAT IS THE POINT OF THIS POST?

I do represent commercial real estate developers (mostly property turn-around specialists and redevelopers) and commercial real estate investors. Developers often tell me they are looking for development opportunities Continue reading

ICSC RECon 2014 – SPOTLIGHT: MONEE, ILLINOIS

ICSC RECon 2014 is in full swing as the largest retail real estate convention in the world. Every year, retail owners, investors, developers, lenders and other commercial real estate professionals converge on Las Vegas, NV to network, discover, promote their projects, look for development opportunities and make new deals. This year is no exception. There are an estimated 33,000 real estate professionals in attendance for this action-packed three day convention at the Las Vegas Convention Center.

http://www.dreamstime.com/royalty-free-stock-images-building-future-city-image20348789Once again this year, members of the International Council of Shopping Centers are recognizing and acknowledging the need for public-private partnerships with local communities to promote economic development. The extremely difficult economic conditions over the past several years have taken a toll on communities and developers alike. Now, more than ever, they need each other to facilitate mutually beneficial development.

To help local governments establish and promote much needed permanent, beneficial economic changes for their communities, ICSC in cooperation with other development groups and agencies continues to Continue reading

Commercial Real Estate Due Diligence – Do You Know the Four Areas of Inquiry?

Albert Einstein:           “Everything should be made as simple as possible, but not simpler.”

Commercial Real Estate Due Diligence – the Four Areas of Inquiry

cropped-dreamstime_m_4416964.jpgI’m a big fan of Albert Einstein. He’s one of my intellectual heroes.  He could see and understand what others could barely imagine. His greatest gift, I believe, was his ability to find answers to questions others didn’t even know existed.

Real estate due diligence requires insight as well. To find the answers, you must Continue reading

IICLE – NEW PUBLICATION RELEASE – ENVIRONMENTAL LAW FOR ILLINOIS CRE TRANSACTIONS


IICLE | 3161 W. White Oaks Dr. | Ste. 300 | Springfield, IL 62704 | United States

NEW PUBLICATION RELEASE

2014 Edition (Includes Forms)

Environmental Law in Illinois Corporate and Real Estate Transactions

This handbook is a unique resource for Illinois practitioners that balances business and real estate practice with environmental law issues. Whether you represent commercial landlords, manufacturers, real estate developers, government agencies, or private landowners, this handbook will prepare you to tackle any environmental issue.

It also provides practical guidance on

  • How to conduct an “all appropriate inquiries” investigation in a real estate transaction
  • The environmental due diligence process
  • Practice in various environmental forums in Illinois
  • Programs and redevelopment incentives to return brownfields to productive use
  • How federal bankruptcy law intersects with environmental issues in a real estate transaction

More Information

 

 

2014 Edition

$159

 

This handbook comes with editable forms, including

  • Definitions
  • Warranties of Seller/Due Diligence Examples
  • Standards for Issuance of NFR Letter
  • Sample Lease Provisions
  • Absolute Pollution Exclusion

Continue reading

IN PRAISE OF REAL ESTATE DEVELOPERS – Let’s Do Lunch!

This article is being republished as a welcoming salutation to many of my long-lost Real Estate Developer friends.  You have been missed over the past several years. Call me.  Let’s do lunch!

RSP_LogoFull_2PMSDid I happen to mention I love Real Estate Developers? Not like I love my wife or my kids, or even my dog, but Real Estate Developers are definitely among my favorite people.

Think about it.

Real Estate Developers are like Gods. [Well, miniature gods, at least.] They create much of the physical world we inhabit. The homes and condominiums we live in. The grocery store and pharmacy down the street. The resorts and casinos and golf courses we enjoy for leisure. Restaurants. Shopping centers. Office buildings. Movie theaters. Truck terminals. Medical and surgical centers. Spas. Factories. Warehouses. Auditoriums. Parking garages. Hotels.

You name it; if its man-made, attached to dirt, and we can get inside it, a Real Estate Developer was probably involved. Continue reading

Due Diligence Checklists for Commercial Real Estate Transactions

Are you planning to purchase, finance or develop any of the following types of Commercial or Industrial Real Estate?

  • http://www.dreamstime.com/stock-image-aerial-view-building-construction-image24028951• Shopping Center?
  • • Office Building?
  • • Restaurant/Banquet property?
  • • Parking Lot/Parking garage?
  • • Retail Store?
  • • Gas Station?
  • • Manufacturing facility?
  • • Distribution Center?
  • • Logistics Terminal?
  • • Medical Building?
  • • Nursing Home?
  • • Hotel/Motel?
  • • Mixed-Use?
  • • Pharmacy?
  • • Special Use facility ?
  • • Other?

A KEY element to successfully investing in commercial or industrial real estate is performing an adequate Due Diligence Investigation prior to becoming legally bound to acquire the property. An adequate Due Diligence Investigation will assure awareness of all material facts relevant to the intended use or disposition of the property after closing.

 The following checklists will help you conduct a focused and meaningful Due Diligence Investigation. Continue reading

From Tampa Bay Business Journal – Crownfunding Rules Approved by SEC

 

Tampa Bay Business Journal
Shared from the Tampa Bay Business Journal

Crowdfunding creates some very interesting opportunities for small businesses, including small real estate related businesses. Stay tuned . . .

SEC finally approves proposed crowdfunding rules

Published: October 23, 2013 by the Tampa Bay Business Journal

Crowdfunding moved closer to becoming a reality for small businesses Wednesday morning when the Securities and Exchange Commission proposed rules that will govern how shares in small companies are sold through Internet intermediaries.

View full article

Copyright (C) American City Business Journals Inc. All rights reserved. bizjournals digital network

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10 THINGS EVERY BUYER NEEDS TO CLOSE A COMMERCIAL REAL ESTATE LOAN

Commercial Real Estate Closings

Since 1978, I have represented borrowers and lenders in commercial real estate transactions. Throughout the process of negotiating the sale contract, all parties must keep their eye on what the Buyer’s lender will reasonably require as a condition to financing the purchase. This may not be what the parties want to focus on, but if this aspect of the transaction is ignored, the deal may not close at all.

RSP_LogoFull_2PMSSellers and their agents often express the attitude that the Buyer’s financing is the Buyer’s problem, not theirs. Perhaps, but facilitating Buyer’s financing should certainly be of interest to Sellers.  How many sale transactions will close if the Buyer cannot get financing?

This is not to suggest that Sellers should intrude upon the relationship between the Buyer and its lender, or become actively involved in obtaining Buyer’s financing. It does mean, however, that the Seller should understand what information concerning the property the Buyer will need to produce to its lender to obtain financing, and that Seller should be prepared to fully cooperate with the Buyer in all reasonable respects to produce that information.

Basic Lending Criteria

Lenders actively involved in making loans secured by commercial real estate typically have the same or similar documentation requirements.  Unless these requirements can be satisfied, the loan will not be funded.  If the loan is not funded, the sale transaction will not likely close.

 For Lenders, the object, always, is to establish two basic lending criteria:

 1.         The ability of the borrower to repay the loan; and

 2.         The ability of the lender to recover the full amount of the loan, including outstanding principal, accrued and unpaid interest, and all reasonable costs of collection, in the event the borrower fails to repay the loan.

In nearly every loan of every type, these two lending criteria form the basis of the lender’s willingness to make the loan. Virtually all documentation in the loan closing process points to satisfying these two criteria.  There are other legal requirements and regulations requiring lender compliance, but these two basic lending criteria represent, for the lender, what the loan closing process seeks to establish.  They are also Continue reading