Real Estate
Practice Leaders: Norman B. Berlin and Matthew J. Swett
Pepper Hamilton LLP’s Real Estate Group represents clients in all aspects of real estate development, transactions and litigation. We provide clear, practical advice to help clients achieve their business goals, whether it involves a simple lease renewal, a complex securitization financing, a mega-development proposal or a tax dispute. In each matter, we define success the same way: by meeting the client’s objectives as efficiently and effectively as possible.
The Pepper Advantage
Pepper’s has more than 35 lawyers experienced in a broad range of real estate matters. While our attorneys are skilled and experienced in a variety of niche areas of real estate law, we don’t have the “tunnel vision” that unfortunately is common to many specialists. Business challenges rarely, if ever, can be segregated into the neat legal categories specialists like to operate in; often problems overlap several legal areas or are related to important issues outside of the specialist’s discipline.
Because of the breadth and depth of our group, we can handle the most detailed and complex matters – without ever losing focus on how the matter relates to our client’s overall business goals. That means we will get the right people at the right level doing the right work for you from the start. As one client told us recently, what sets Pepper apart from the competition is that we “find solutions to problems, rather than find problems with solutions.”
Another advantage to retaining Pepper is the ability of our real estate group to call on more than 400 peers in a wide range of related areas, such as corporate law, construction, finance, tax, environmental, bankruptcy and insurance. From antitrust to zoning, chances are a Pepper lawyer has already handled a case like yours.
Our philosophy about client service can be summed up in one sentence: We counsel each client as if it were our only client.® That is not just a slogan. It is the basic principle guiding our practice. It means that every phone call, every fax, every e-mail or other communication from a client is important, and is treated accordingly. It means that while we will strive to get you the answer as quickly as possible, we will not let the need for speed cloud the quality of our work – we will always give your matters our best objective judgment.
Our Clients
Our clients include national and international businesses, regional powerhouses like Brandywine Realty Trust and BPG Properties, LTD, and local institutions like the Pennsylvania Ballet. We represent developers, real estate investment trusts (REITs), commercial and consumer lending institutions, Fortune 500 and closely held corporations, major nonprofit institutions, investment banking firms, commercial real estate companies, retail and hospitality businesses, small business investment companies (SBICs), syndicated partnerships, and state and local governmental agencies.
Our Work
Our practice involves the development, acquisition, disposition, leasing, financing, construction and syndication of industrial, commercial and residential real estate; real estate loan and partnership workouts, foreclosures and bankruptcies; zoning and land use; housing and urban development; and real estate taxation. We also handle all types of litigation involving real estate.
While we perform basic legal work necessary to structure and close transactions, we also help clients identify and develop business opportunities. Through close working relationships, we hope to assist clients in meeting their goals and objectives beyond a single transaction.
Our core practice includes:
Real Estate Investment Trusts (REITs). Pepper has extensive experience in handling large, complex corporate and finance transactions for public and private REITs and other large owners of commercial real estate. We have handled REIT mergers and acquisitions and represented REITs in numerous public and private equity and debt offerings, joint ventures and portfolio acquisitions and dispositions.
For example, Pepper represented Brandywine Realty Trust, a New York Stock Exchange REIT headquartered in Philadelphia, in its $3.3 billion acquisition of another NYSE-traded REIT that owned more than 100 Class A office and industrial properties throughout the Mid-Atlantic and Washington D.C., California and Texas. This transaction also involved a concurrent spin-off of more than $750 million in assets to an institutional investor. Over the course of our long relationship with Brandywine, we also have assisted in a wide number of other sophisticated corporate and financial transactions, as well as real estate, employment and other matters.
Pepper’s REIT client base also includes mortgage REITs, which focus on lending money for mortgages to owners of real estate, or purchase existing mortgages or mortgage-backed securities, rather than owning properties directly. We assist these clients in complex financing transactions, tax matters and other issues, including matters related to the current credit crunch in the mortgage market.
Pepper has a sophisticated Corporate and Securities Practice Group with a decades-long track record of assisting clients with a wide range of corporate transactions, including M&A transactions, securities offerings and other matters. Our experience relevant to REITs includes counseling a number of investment banks in Rule 144A and public offerings of debt and equity in REITs, as well as counseling REITs in such transactions.
Acquisition and Development. We represent clients in the acquisition, development, construction, leasing and sale of office buildings, shopping centers, single-use commercial properties, hotels, development parcels, residential and multifamily properties, and mixed-use projects. Our engagements in this area include the acquisition and development of downtown office buildings and suburban office parks, corporate headquarter facilities, build-to-suit manufacturing, warehouse and distribution facilities and industrial parks, residential multifamily complexes, mixed-use developments in office parks, single-family residential subdivisions, retail developments, hotels, condominium conversions, cooperatives, medical centers, assisted living communities, nursing homes and resort communities. We are experienced in government contracts as well as construction financing and dispute resolution.
We assist large institutional real estate owners, REITs, lenders and users in evaluating and structuring acquisitions, dispositions and leasing of properties and portfolios. We have represented a major city in the development of its convention center, and we handle many complex transactions for international companies and other corporate and real estate clients. Retail “Big Box” Development. One aspect of our real estate development practice is our experience working with developers on shopping centers anchored by “big box” retail stores, or stand-alone big box retail centers. Our experience includes all aspects of site acquisition, including title, purchase agreements, joint development agreements, reciprocal easement agreements, access agreements, all types of municipal agreements, and developer agreements with municipalities for the site and access to sewer and water.
We work from the beginning with the developer’s engineers to develop a cohesive site plan to obtain approval from the municipality. We analyze the easiest way to obtaining zoning, land use approvals and highway occupancy approvals, and follow through to completion of the development. After construction, we work with the municipality to see that all required conditions for approval are met and that any operations issues are addressed. In addition, we often obtain zoning and land use approvals after a retail center is opened for specific purposes such as outside retail sales or garden centers.
Land Use and Zoning. We help property owners and developers obtain necessary planning and zoning approvals, changes and permits, including representing clients in appeals before municipal zoning hearing boards and trial and appellate courts. In addition to land use and zoning approvals, we assist clients in obtaining environmental permits from federal and state authorities. We are familiar with state and local requirements and procedures in dozens of municipalities throughout New Jersey and Pennsylvania.
Real Estate Leasing. Many business people consider entering into real estate leases or subleases to be “routine” transactions, and frequently they are. But leases may carry a variety of business and legal risks, and sophisticated clients understand that a well-negotiated lease can save time and money. Many lease and sublease transactions require an assessment and allocation of costs, benefits and risks. Our group has the experience, market knowledge and business savvy to help clients sort through the competing claims of leasing brokers, dense leasing documents, and complex construction and development issues. We also understand the need to negotiate and document the transaction quickly, while minimizing the client’s legal and business risks.
We are experienced in representing landlords and tenants in a variety of leasing transactions, including build-to-suit leases, turnkey leases, tenant improvement allowance leases, subleases, office leases, retail leases, warehouse and industrial leases, and manufacturing facility leases.
LEED® and Green Building. Pepper advises clients on sustainable development matters including those related to the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED®) rating systems. We counsel building owners and construction firms on the practical risk allocation, contracting scheme, and organization of a project team for a green building project. We have experience creating contracts to promote or require integrated project delivery, which is necessary to satisfy the LEED requirement for integrated design.
Pepper counsels clients on integrating LEED or other green building rating systems into leases for green buildings. Many such rating systems require additional or new obligations to be placed on landlords and tenants. Pepper advises clients regarding the appropriate scope of these obligations and a party’s rights with regard to same under a lease for a green building.
Economic Development Incentives and Public/Private Projects. Increasingly, businesses opening new facilities or relocating search for economic development incentives such as grants, low-interest loans, tax credits, tax exemptions, pooled financings and tax-exempt financing. Many complex projects, especially multi-use projects, also involve public/private joint ventures and operations. We are skilled at navigating through government bureaucracies and coordinating the requirements of government programs with the private sector portion of joint projects. Several Pepper lawyers are veterans of key government agencies and are experienced at bringing all the public and private sector components of a project together.
Our experience includes:
- Tax exemptions – Pennsylvania Keystone Opportunity Zones, New Jersey PILOT projects, Pennsylvania Local Economic Revitalization Tax Assistance Act abatements, Pennsylvania Tax Increment Financing Act and Michigan TIF districts
- Tax credits – Job Creation Tax Credits
- Grants – Pennsylvania Keystone Opportunity Grants, U.S. Department of Housing and Urban Development Brownfields Economic Development Initiative grants and Pennsylvania Act 2 grants
- Low-interest loans – Pennsylvania industrial development loans
- Pooled financing programs – Pennsylvania Economic Development Financing Authority programs
- Tax-exempt financing for manufacturing facilities, parking facilities, solid waste facilities, mass commuting facilities
- Public/private infrastructure and multiuse projects (such as parking, utilities, river walks and air rights).
Real Estate Finance. Eager mortgage brokers, investment bankers and bank loan officers tempt businesses with a dizzying array of financial products for the purchase and development of real estate. Every financing option, however, carries with it various costs, benefits and risks. Our group is experienced at helping clients understand and assess available options and decide which financing methods best suit their business needs. Our experience includes advising clients on traditional mortgage loans, mortgage securitizations, off-balance sheet financings, interest rate swaps and other derivatives, bank syndications and bond market financings.
We also help owners and developers restructure and refinance borrowing entities, whether troubled or healthy. We help resolve disputes among partners or shareholders, and between the entities and their creditors or investors.
Real Estate Taxation. We represent property owners and real estate developers of commercial and industrial properties throughout Pennsylvania and surrounding states, including Maryland, New Jersey, Ohio and West Virginia, in the appeal of real estate tax assessments.
We represent clients in appeals before local boards of assessment, the local and appellate courts, including the Commonwealth Court and Supreme Court in Pennsylvania, until the final resolution of the appeals. Representative clients include owners of shopping malls, strip malls, local and national retail stores, apartment buildings, government-subsidized housing projects, office buildings, automobile dealerships, fast-food restaurants, industrial sites and telecommunication towers.
Real Estate Litigation. We are experienced in all aspects of real estate litigation. Our experience includes issues of foreclosure/deficiency judgments, ownership disputes, easement and boundary disputes, breach of lease/lease options, right of first refusal, buy-sell agreements, specific performance disputes, fraudulent nondisclosure of environmental contamination, tax appeals, land use and zoning appeals, and eminent domain and condemnation matters.
We don’t just “manage” litigation for real estate clients. We try cases. Our experience includes a number of successful trials before juries and judges, as well as successful post-trial appeals. Even if a client decides that settlement is the desired outcome of a particular case, the best way to gain a successful settlement is to demonstrate thorough preparation and willingness to go to trial. We also are experienced in all forms of alternative dispute resolution, such as arbitration, mediation, mini-trials, structured negotiations and other techniques.
Brownfields Redevelopment. We represent owners, prospective buyers, developers, lenders, and local governments and redevelopment authorities interested in improving property, or otherwise enhancing its value or reducing liability arising from its environmental condition. We counsel these clients about actual and potential liability, remediation, reuse, financing, sale, lease, donation and strategic stockpiling of Brownfield properties. In addition to assessing liability, we negotiate cleanup obligations, liability limitations between buyer and seller, and title acquisition. We also assist with acquiring liability limitation insurance, and counsel on funding brownfields cleanup and development through loans, grants, bonds and tax increment financing.
Condominiums and Cooperatives. We represent unit owner associations and developers of condominiums and cooperatives. We serve developers by structuring condominium transactions and creating efficient and functional legal structures that satisfy the complex requirements of condominium law. We also advise numerous owners’ associations on matters of day-to-day condominium governance as well as issues involved in managing any large real estate project or business organization.
Housing and Community Development. While many firms have experience in public finance, banking, real estate or administrative law, we are one of the few firms in the country that combines these disciplines in a comprehensive national housing and urban development practice. (See also our Affordable Housing practice description.)
We represent clients before HUD, the Government National Mortgage Association (GNMA), Fannie Mae, Freddie Mac, Department of Defense, Federal Reserve Board, Office of Comptroller of the Currency and Office of Thrift Supervision. We help obtain agency approval of business plans, defend against administrative enforcement actions, negotiate the purchase of assets from government agencies, participate in agency financing, and assist clients in negotiating workout arrangements on troubled properties. Our lawyers have served in several of these agencies.
We are involved in all HUD housing and community development and GNMA programs, and the multifamily programs of Fannie Mae and Freddie Mac, and we are familiar with the requirements of the Community Reinvestment Act (CRA). Our lawyers also assist clients in the sophisticated area of low income housing tax credit development, and represent for-profit and nonprofit developers of, and investors in, low-income housing across the nation.
