Can you say eminent domain?

We lawyers like to joke about eminent domain and the high unlikelihood that this will occur, especially with retail malls. Of course, thanks to the horrible Keto decision, you can take someone's house to build a hotel.That's because we are not in Venezuela. According to Peter Maclennan, Hugo Chavez apparently decided he didn't want a shopping mall to be finished and opened, so he announced that the mall will be "expropriated," or condemned. Malls are not socialistic enough, but a hospital or school is all right.No, I do not see this happening in the US, even with an Obama administration. :)...

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Good Morning, Manila! (and Good Evening, Chicago)

Magandang Umaga! It is mid-morning Monday in the Philippines and Sunday evening in Chicago, and I just learned the Bears lost, blowing any chance they had of the playoffs. I never expected them to be even close, so I am not bummed out. Now I pin my hopes on a Rose Bowl victory by USC against Penn State.I am still astounded by the amount of dirt being pushed here in the Philippines. We had a terrific visit yesterday to Tagaytay Highlands, an upscale, private real estate development about 60 minutes from Manila. The facilities, security and dirt were all nothing short of magnificent. The...

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Philippine Perspectives

Shopping here appears to be the national pastime. Forget basketball. Hit the mall. You can even got to Sunday Mass there if you are so inclined, with services in English and Tagalog. (Remember, English is an official language here.)We are about to celebrate my mother-in-law's 80th birthday in an hour. There should be 200+ people in our yard here, and hopefully we'll have enough food. You never know how many people will show. The problem with estimating a crowd is that it is acceptable for the invitees to bring family and friends. And since my wife and I are the official hosts of the party...well,...

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RIP Al Meyerhoff

I was sorry to see Al Meyerhoff's obituary in the New York Times while trying to catch up on news from half a world away.Al was a tenacious, courageous but affable litigator who spent his life fighting for the little guy. When I was a junior lawyer I was involved in a Proposition 65 lawsuit opposite Al and the NRDC. I remember Al on conference calls as the scrappy guy who wanted to fight, fight and fight until he won, but never in a mean spirited way. Even though we were opponents I could not help but respect him. Call him a true believer, if you will. Requiscat in Pac...

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A whole lot going on at year's end

I know there is a lot going on at home. Real estate developers want a bailout because so much debt is coming due. Thacher Proffitt, a firm I worked with a few times on CMBS deals, is dissolving, and that's sad. And there's so much more going on, even at Christmas -- to much to write about. But I am 14 time zones away, safely ensconced in Manila, where you walk outside and you feel like you are in a steam bath. If you have never been to Manila, I recommend it for many reasons. First, if you are a dirt junkie, you will be amazed at the amount of real estate development going on, small, large...

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Happy Holidays!

I am swamped with year-end work right now, and I'm trying to cram it all into this week since I am leaving for Manila on Saturday night for the holidays, which means I also have family obligations here to which I must attend. That does not lead to much time to write here. I'll perhaps post something about dirt issues in the Philippines once I get there, and I'll be back if something compelling arises. But if I don't have the opportunity to do so -- which is what I think might happen these next few days -- please accept my best wishes for a happy and healthy holiday season. We often forget what...

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GGP update: will Citibank lead, follow, or get out of the way?

GGP moved an updated press release stating, "[i]t has not reached unanimous agreement with its syndicate of lenders to further extend the maturity date on the $900 million Fashion Show and Palazzo mortgage loans. The Company is continuing its discussions with lenders regarding its loans."According to the press, the word is that Citibank, the lead lender, is the lone holdout. Globest.com says that Citi is "heap[ing] requirement upon requirement for the REIT to meet." Now, we don't know exactly what those requirements are, but of course the cynic in me immediately says, "How much money has the...

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Whither Sears?

I have such fond memories of Sears. Just about any my age or older does. The huge catalog, the Christmas Wish Book, the retail stores, the candy counter. I think I just gained two pounds thinking about chocolate covered candy.After watching the local segment of the Today show this morning, I read perhaps the most succinct story ever, the entire text of which I repeat below: There's a dire warning from the chairman of Sears Holding Corp. Edward Lampert said this may be the final holiday season for the Chicago-based retailer, as the company continues wrestling with falling cash reserves and...

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GGP- day of reckoning?

Hard to say at this point. The stock's up 31% as I type. The company announced that it was able to refinance $900 million in debt, but that is not the $900 million that comes due today for the Vegas malls. There's no assurance of further extensions on those loans; I'd have to speculate that this is because Citibank has been playing hardball by wanting a retrade on another deal. And I guess the other banks cannot, have not or will not buy Citi out of its share of the loans, which is one way to skin that cat.For those of you interested in the CMBS part of the deal in the event of a filing, this...

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Hotel 71...it's baaack (on the market)

I promised to follow up here when there is more news about Hotel 71, and some moved this morning at Crain's.The word is that Wachovia, the special servicer for the CMBS pool that took title to the property after winning a bankruptcy auction, has hired an Atlanta-based broker to seek buyers. Tough market, but, as the story notes, this will be an interesting test of the waters.Also according to the story: Complicating the transaction further, a buyer would need to spend about $20 million to finish a renovation..... One person familiar with the hotel expected it to sell for no more than $60 million,...

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The Decline of GGP

After being interviewed today for a story on GGP, I noticed this piece in the Journal on the mall owner's decline (and hopefully not its demise -- the two week loan extension's up Friday). I'll let you digest it just as I still am doing as I type.Maybe the last paragraph says it all:The Bucksbaums, meanwhile, have seen their personal fortunes fall with the company's. According to friends, Matthew [Bucksbaum, the retired co-founder of GGP] and [his wife] Kay have decided to cancel their annual holiday party in Aspe...

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State for Sale

Or so say the Feds. Here's a link to the criminal complaint against the governor. Enough sai...

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Sorry Sam - still no subscription for you

Yep. Yesterday, advisers, today, a Chapter 11 filing for Tribune Corporation. Even the Grave Dancer, much as I admire him, can't win them all."Over the last year, we have made significant progress internally on transitioning Tribune into an entrepreneurial company that pursues innovation and stronger ways of serving our customers," [Sam] Zell said in the [press] release. "Unfortunately, at the same time, factors beyond our control have created a perfect storm -- a precipitous decline in revenue and a tough economy coupled with a credit crisis that makes it extremely difficult to support our...

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Gee, could you paint a bleaker picture? And is that a good thing?

When I read this story, captioned "It can't get much worse," I wanted to jump out the window. Luckily I was in the basement.Seriously, here's what some are saying in institutional investor land:Properties with purchase offers are not closing; transactions are down; and managers are going hat in hand to their investors for cash to prop up properties they do own. “There's no light, no tunnel, no liquidity, no equity,” said Jeff Barclay, managing director and head of acquisitions and development at real estate investment firm ING Clarion Partners, New York. “Some people are being wiped out,”...

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Thursday Tidbits - December 4, 2008

CoStar reports the ubiquitous Younan Properties is taking the plunge on 180 N. LaSalle, with a closing date of no later than December 17.There's light at the end of the tunnel? That's what panelists were saying in Irvine yesterday.If you own a title policy through LandAmerica or are closing a deal with them, don't panic. Fidelity has you covered. If you have a 1031 account with them, then, you may have a problem. That company and the holding company went bankrupt. Lawyers Title and Commonwealth Land Title did not and are being sold to Fidelity and are doing business as usual.Bailout money...

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A tale of two bankruptcies

Bally Home Fitness is belly up again. After a prepackaged 11 last year they filed another one today, with the goal of conserving cash in a sale scenario or a reorganization.The gym business is utterly cutthroat competition. You have the higher-end places that can charge (a little) more but have fewer members, and you have the others (such as Bally) that rely on large numbers and low fees. In either event the gyms rely heavily on additional services to make more money and in this economy...you get the picture. With those numbers, it is hard to make things work. But Bally's been around a...

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Can you say operating covenant?

In an office lease, a landlord often does not care if a tenant actually uses its space so long it pays the rent.Retail? That is a while different ballgame. Nothing looks worse than a shopping center where the tenants have "gone dark," or closed the store while still paying rent. You have a myriad of issues related to this that go far beyond the scope of a blog. I'm sure there are some articles about this phenomenon out there.I got a kick out of a Journal story yesterday about this. Some retailers are trying to get out of deals without having to pay hefty termination fees. In the case of...

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Chicago's coolest offices - The Powerhouse Building

Or so says Crain's. Even though I'm not in the story (big deal), it is very cool to see your friends, your clients and your office building in the news.And I am inclined to agree. Even my little space that I hardly use, while not as dramatic as Structured Development or Wight & Company, has a great big window, exposed brick, and all the modern trappings. Yes, it is the building on this page on the left. And I like i...

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Jamie's back in town

The New York Times and Legal Week both report that bankruptcy and restructuring guru Jamie Sprayregen is returning to Kirkland & Ellis, where he was before going to Goldman Sachs for a stint as a managing director.According to the Times:“I missed the practice of law,” Mr. Sprayregen, 48, said. “What I’ve learned from Goldman, the financial expertise I’ve gained, will hold me in good stead and will be extremely helpful on the lawyer side of restructuring.”I don't know Jamie personally, but I was just talking about him with a colleague a week or two ago, and my colleague saw this coming because...

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Want a weekend roundup?

Can't do better than Deal Junkie, so just go there, okay? The highlights for me were the story on commercial loan delinquencies, and the WSJ piece from last week on construction expected to start up again with an Obama stimulus package emphasizing public works spending.By the way, I hope you all had a good Thanksgivin...

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Two more weeks for GGP, says the Tribune

I look at this story as a little good news in a whole pile of bad for GGP, and a testament to Metz, Nolan & Co. Although I guess you could argue that the holiday caused this, if there weren't legitimate discussions going on I don't think the short term extension on some $900 million in debt would have been granted.There's a lot more to this than just signing a short term extension. Loan covenants have to be looked at carefully, technical or material defaults examined and plenty of paperwork needs to be prepared by lawyers. But the lenders also have to think: do I really want these assets...

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