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Monthly Archives: April 2013

LEGAL DUE DILIGENCE: DON’T FORGET TO TELL YOUR LAWYER ABOUT CLOSING!

Odd things are happening. Did people forget during the recession about the role of lawyers in commercial real estate transactions?

I have been negotiating and closing commercial real estate transactions for over 35 years. Happily, as the market is picking up, I am actively at it again.

For the first time in my career, though, a remarkably odd phenomena is occurring. Clients are scheduling commercial real estate Closings with their lenders, but failing to inform their lawyer. Lenders are sometimes failing to contact the lawyers also. This would be remarkable enough, and even a bit suspicious, if I were talking simply about refinance closings, but I’m not. I’m talking about sale/acquisition closings.

It’s as if the parties have been so focused upon the challenges in obtaining financing over the past five years that they have forgotten that financing is not the only requirement for closing.

I have seen it while representing buyers, and have seen it while representing sellers. Ironically, it seems to occur more often when the buyer is a sophisticated commercial real estate investor. I’m guessing this is because some sophisticated buyers are trying to save money by conducting their own due diligence investigations themselves, or through third party vendors perceived to be less expensive than lawyers.

Be that as it may, there remains, in most transactions, a substantial amount of legal work necessary to gear up for closing. Title clearance; transfer documentation; authority documentation; loan document review; just to name a few areas requiring attorney attention. Legal due diligence is just as important as financial and operational due diligence. And it takes a reasonable amount of time to complete competently.

HERE’S A BIT OF FREE LEGAL ADVICE: Don’t wait until three or four days before closing to contact your lawyer. Contact them when there is still time for them to do you some good!!!

R. Kymn Harp
Robbins, Salomon & Patt, Ltd.
Chicago, IL
www.rsplaw.com
JOIN MY THOUGHTBOARD: www.Harp-OnThis.com

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Kymn Harp has shared: City wants to change transfer tax law to protect revenue

Of course, instead of “protecting” its revenue stream, an argument might be made that the City of Chicago is trying to legitmize an unlawful practice of collecting transfer taxes when none are legally due – a position the City’s own Administrative Law Judges are confirming.
City wants to change transfer tax law to protect revenue

Source: chicagobusiness.com

Battle heats up after city loses court challenges.

Kymn Harp sent this using ShareThis. Please note that ShareThis does not verify the ownership of this email address.

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Chicago Grid | Big new plans for Chicago’s Old Main Post Office

TIME TAKES TIME . . . Sometimes – lots of it.

Can this massive project get off the ground in the foreseeable future? It’s hard to see how – but time will tell.

Planned redevelopment of Chicago’s Old Main Post Office.

http://www.chicagogrid.com/news/dave-roeder-post-office-plans/

R. Kymn Harp
Robbins, Salomon & Patt, Ltd.
Chicago, IL
www.rsplaw.com
JOIN MY THOUGHTBOARD: www.Harp-OnThis.com

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BOTTOM FEEDERS – A Leading Economic Indicator?

Bottom Feeders – and Bottom Feeder Funds – Our New BFF?

Bottom feeders have a distasteful reputation with some – but, truth be told, they are among the most reliable leading economic indicators of recovery for the commercial real estate industry.

http://www.dreamstime.com/stock-images-financial-crisis-word-cloud-illustration-image29153144There is a stunning disconnect between equity markets and the economy as a whole. The Dow Jones Industrial Average is at record highs, with 15,000 in plain sight.  Equity investors are betting on a bright future. To gauge the economy by that measure, the economy appears to be healthy and rebounding nicely.

Leave Wall Street, and drive through urban and suburban retail districts, and the picture is not so bright. Vacant and boarded up storefronts are common. Parking lots are in disrepair. Shopping center signs are blank – or filled with half burnt-out signs displaying names of tenants past.

Sure. Commercial deal flow is beginning to pick up, but compared to what? A car travelling three miles per hour can triple its speed, but it is still moving at a remarkably slow pace by most standards.

I went for a drive recently, touring retail shopping centers and office parks to find out where the action is.  The answer?  Almost nowhere.   It didn’t really surprise me. Although deal flow is picking up in my practice, most deals are with cash-rich bottom feeders (or bottom feeder funds)  buying up distressed properties.  Not that I’m knocking bottom feeders. Chances are good they will (more…)

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