Understanding the Commercial Lease Letter of Intent: Key Business Terms to Address Before the Lease Is Drafted
In most commercial leasing transactions, the parties begin negotiations with a Letter of Intent (“LOI”) or term sheet before drafting a formal lease agreement. Although the LOI is usually technically non-binding, it frequently establishes the core economic and...
What Is a Promissory Note in a Commercial Real Estate Transaction?
In most commercial real estate transactions—whether involving acquisition financing, seller financing, or capital contributions within a joint venture—the promissory note is the document that actually evidences the borrower’s repayment obligation. While loan...
Key Legal Considerations When Forming a Real Estate Joint Venture
Real estate joint ventures are among the most common ownership structures for middle-market commercial real estate acquisitions. In Massachusetts and elsewhere, these arrangements are typically implemented through limited liability companies governed by operating...
Rent Credits in a Commercial Lease: An FAQ Guide
Rent credits in a commercial lease are frequently misunderstood. Many people think of “free rent” at the beginning of a lease term and stop there. In reality, rent credits are broader than that. They can be negotiated concessions at lease inception, or they can...
How to Terminate a Commercial Lease – A Guide for Tenants
One of the questions we get asked most often is: as a commercial tenant, how can I terminate my lease? The first thing to understand is that, generally speaking, a commercial lease does not give a commercial tenant the right to terminate early. There is usually no...
Commercial Landlord’s Guide to Letters of Credit
In virtually every commercial lease negotiation, landlords look for credit support to backstop a tenant’s obligations. Whether it is unpaid rent, repair obligations, or damages caused by tenant default, landlords want to ensure there is a readily accessible source of...
Caps and Floors on Seller Liability in Commercial Real Estate Purchase Agreements
When negotiating a commercial real estate purchase agreement, one of the most important—and often misunderstood—topics is the allocation of risk between buyer and seller after closing. While the purchase price is the headline number, the contract provisions governing...
How Real Estate Investors Can Transfer Property Into an LLC
Many real estate investors begin by purchasing investment property in their personal names. While this is common, it is not always the most strategic ownership structure. Transferring real estate into a limited liability company can provide liability protection,...
Structuring a Tenant-in-Common (TIC) Arrangement to Avoid IRS Partnership Treatment
Tenant-in-common (TIC) ownership structures are a common vehicle for commercial real estate investments, particularly where multiple investors pool funds to acquire a property. A properly structured TIC allows each investor to own a direct, undivided interest in the...
Drafting Tip: Addressing Direct Claims in Indemnity Provisions in Commercial Real Estate Contracts
In commercial real estate contracts, indemnity provisions are a foundational risk allocation tool. They are commonly used to shift responsibility for certain claims and losses from one party (the indemnified party) to another (the indemnifying party). At a high level,...