Attorneys for Buying, Selling, and Leasing Commercial Real Estate in New York, NY

As commercial real estate attorneys, we represent people who are buying, selling, and leasing commercial real estate in New York, NY.

Commercial real estate matters are more complex than residential real estate.

We can assist you in the different areas of commercial real estate, such as:

• the formation of legal entities that would acquire the commercial property in order to maximize legal and tax efficiencies
• drafting agreements among investors who are acquiring commercial real estate together
• advising on conducting due diligence
• drafting and negotiating real estate sale and purchase contracts
• handling all aspects of commercial leasing

Buying and selling commercial real estate is more complex than a simple sale and purchase transaction of residential real estate. Due to the amounts involved, purchasing commercial real estate may require the investment of several parties. A commercial real estate attorney can:

• Advise the client on the advantages and disadvantages of the different legal structures that could acquire the commercial real estate and recommend the most appropriate legal structure for legal and tax efficiencies, given the objectives of the client
• Prepare the formation documents in case a legal entity shall acquire the commercial real estate
• In case there are multiple investors, draft shareholder, membership or joitn venture agreements to provide a legal framework in governing the rights and obligations of the co-owners to ensure clarity among the roles of the parties and to preserve their harmony and relationship
• Review loan, mortgage, and guaranty documents with financing company
• Review and negotiate contract of sale with seller
• Conduct due diligence and title examination on property, including indetifying liens,  reviewing permits and zoning to ensure that the commercial real estate is viable for the proposed project
• Handle pre-closing and closing activities to ensure all documents are properly executed
• Draft and negotiate commercial lease agreements

Types of Commercial Real Estate Transactions We Handle

• Office buildings and office condos. From single-tenant boutique buildings to large multi-tenant towers.
• Retail and storefront properties. Including single-tenant net-leased properties, neighborhood shopping centers, and street-level retail.
• Multifamily apartment buildings. From walk-up brownstones to large elevator buildings and mixed-use buildings.
• Industrial and warehouse properties. Distribution, light industrial, and flex space.
• Hospitality properties. Hotels, motels, bed-and-breakfasts, and short-term-rental conversions.
• Healthcare and medical office buildings. With special attention to regulatory and zoning considerations.
• Mixed-use buildings. Combining residential, retail, office, and sometimes parking components.
• Development sites and land. Including air rights, development rights, and land assemblage transactions.

Due Diligence on a Commercial Acquisition

The due diligence period is when problems get found. A typical commercial due diligence checklist includes:

• Title. Title insurance commitment, exception documents, recorded easements, restrictions, and encroachments.
• Survey. Modern ALTA survey showing boundaries, improvements, and any encroachments.
• Zoning. Conformance with current zoning, allowed uses, height and bulk limitations, parking requirements, and any non-conformities that may be lost if the building is damaged.
• Building Department. Certificate of occupancy, open permits, violations, and any work without permits.
• Environmental. Phase I environmental site assessment, with Phase II testing if Phase I identifies recognized environmental conditions.
• Engineering. Property condition assessment covering the structure, roof, mechanical systems, elevators, and the like.
• Leases and rent roll. Estoppel certificates from each tenant confirming the key lease terms and the absence of landlord defaults.
• Service contracts. Management, maintenance, security, snow removal, and other contracts that the buyer will inherit or terminate.
• Insurance. The seller's loss history, including any open or recently closed claims.
• Litigation. Any pending or threatened litigation involving the property or the seller.
• Financials. Income and expense statements for several years, supporting bills and invoices, and tax returns relating to the property.
• Tax certiorari. Status of any pending tax certiorari proceedings, and whether the buyer or seller will benefit from any pending refunds.

The Contract of Sale

The commercial contract of sale is typically far longer and more detailed than its residential counterpart. Critical issues to negotiate include:

• Earnest money deposit, escrow holder, and conditions for release.
• Due diligence period and the right to terminate during it without penalty.
• Title and survey objection process.
• Representations and warranties about the property, including environmental, tenancies, leases, and litigation.
• Survival period for representations and warranties.
• Indemnification structure and caps.
• Conditions to closing, including landlord estoppels and tenant subordination, non-disturbance, and attornment (SNDA) agreements.
• Apportionments and prorations at closing, including real estate taxes, common area charges, security deposits, and rent.
• Casualty and condemnation provisions.
• Default remedies.
• 1031 exchange cooperation provisions.

Financing the Acquisition

Most commercial real estate purchases are financed. Commercial loans differ from residential loans in important ways. They often include personal guaranties (full recourse, limited recourse, or "bad-boy" carve-outs), lockbox arrangements for rents, springing recourse provisions, mortgage tax escrows, debt service coverage covenants, and step-down or yield maintenance prepayment penalties. We negotiate loan documents on the borrower's side or coordinate with lender's counsel as needed.

Title Insurance and Survey Issues

Title insurance protects the buyer (and the lender) against defects in title that the title company missed in its search. Standard exceptions include matters that an accurate survey would show. A modern ALTA survey is the standard for commercial deals because it allows the buyer to obtain extended coverage that removes those survey exceptions. We review the title commitment carefully and negotiate with the title company on objectionable exceptions before closing.

1031 Like-Kind Exchanges

Section 1031 of the Internal Revenue Code allows a seller of real property to defer the recognition of capital gain if the proceeds are reinvested in like-kind real property within strict timelines. The basic timeline allows 45 days from the sale to identify replacement properties and 180 days to close on a replacement. Reverse exchanges and improvement exchanges add complexity. A commercial real estate attorney with 1031 experience can ensure the deal documents preserve exchange treatment without disrupting the underlying transactions.

Commercial Leasing

Whether you are a landlord renting space to a tenant or a tenant taking space from a landlord, the lease is the single most important document. Commercial leases run for years, sometimes decades, and the terms negotiated at the start govern the relationship throughout. Key issues include the use clause, the rent escalation formula, base year and operating expense pass-throughs, real estate tax pass-throughs, assignment and subletting rights, repair and maintenance obligations, alteration rights, signage rights, exclusivity (for retail), renewal options, expansion options, casualty and condemnation provisions, default and cure periods, and surrender obligations. We negotiate commercial leases on both sides, in transactions ranging from small storefronts to large office floors.

Joint Ventures and Co-Investment

Larger commercial deals often involve multiple investors. The joint venture agreement governs how decisions get made, how capital calls work, how distributions are allocated (often through a waterfall with preferred returns and promote splits), and what happens if one partner wants out. A poorly drafted joint venture agreement can lead to deadlock, litigation, and forced sales at unfavorable prices. A well-drafted agreement provides for orderly resolution of disputes and predictable economic outcomes.

Tax Considerations

Commercial real estate is one of the most tax-driven asset classes. Depreciation deductions, cost segregation studies, opportunity zone investments, conservation easements, ground lease structures, and the qualified business income deduction all play a role in deal economics. We coordinate with the client's CPA to make sure the deal structure aligns with the tax planning, and to make sure no opportunities are left on the table.

Transfer Taxes

New York imposes a state real estate transfer tax of $2 per $500 of consideration, plus a mansion tax on residential sales above $1 million (which scales up for higher prices). New York City adds its own Real Property Transfer Tax (RPTT) at rates that vary by property type and price. Allocating these transfer taxes between buyer and seller, and structuring the deal to minimize them where possible, is part of every commercial closing.

Closing the Transaction

The closing of a commercial real estate transaction involves the simultaneous execution and exchange of many documents and the wiring of large sums of money. Typical closing documents include the deed, the bargain and sale or warranty assignments, the bill of sale for personal property, an assignment of leases, an assignment of contracts, a closing statement, transfer tax forms, the buyer's loan documents (note, mortgage, assignment of leases and rents, environmental indemnity, and ancillary documents), the title affidavit, and the FIRPTA certificate if a foreign seller is involved. We orchestrate the closing to make sure everything happens in the correct sequence and that the keys, the funds, and the documents change hands in a coordinated way.

Why Experience Matters

As experienced commercial real estate attorneys, we can advise you on standard provisions in sale, loan, mortgage, and guaranty agreements, including what's reasonable to insist and negotiate on, finding the right balance to ensure that a transaction is finalized and completed. We can also explain and summarize complex provisions in the agreements that can run in tens or hundreds of pages. Translating these complex provisions into simple English so you can understand it before signing anything is essential for a commercial real estate attorney. Should you need legal representation in commercial real estate, we, at the Law Offices of Albert Goodwin, are here for you. We are located in New York, NY. You can call us at 212-233-1233 or send us an email at [email protected].