Real Estate and Politics
The U.S. Senate voted unanimously last week to end a federal filing requirement for owners of condo buildings with more than 99 units that ensnared developers in litigation following the financial crisis of 2008.
During the downturn, lawyers for condo buyers began trying to break the purchase contracts by arguing in court cases that the owners hadn’t accurately complied with a 1969 law named the Interstate Land Sales Full Disclosure Act that required owners of buildings to register with the U.S. Department of Housing and Urban Development and then the Consumer Financial Protection Board.
Rising mezzanine and preferred equity prices, combined with ever-higher land and real estate prices in New York are causing more borrowers and sellers to rethink deals, according to Kramer Levin Partner Jay Neveloff. In some cases that simply means reevaluating their approach to financing acquisitions and developments, while for other buyers and sellers it means “second thoughts” about closing a deal, he said.
“Over the past two to three months a growing number of people have started to reconsider transactions due to pricing issues,” Mr. Neveloff told Mortgage Observer. “The pricing for mezzanine debt has continued to increase steadily. That’s a result of supply and demand and it’s also result of borrowers seeking greater leverage in transactions.”
Kramer Levin Naftalis Frankel
What trends are you seeing in mezzanine lending and preferred investing from the deals you’ve worked on this year? Are you seeing more of one than the other?
Shortly after a Chinese business tapped Studley’s newly opened Shanghai office to help it expand beyond the city and country and procure space in New York earlier this year, Yin Li, head of the brokerage firm’s China operations, hit a roadblock.
In line with standards in China, Ms. Li’s client was looking to sign a short-term two- or three-year lease, which New York landlords were reluctant to accommodate. Instead, Ms. Li convinced her client to seek out an alternative—a sublease deal.
The Lawyers You Call
The Mortgage Observer spoke to Kramer Levin partner Jay Neveloff this month. Mr. Neveloff, a 24-year veteran at the firm, told us what he’s hearing from his wide range of clients following November’s elections and what many of those clients are busiest doing with the end of the year fast approaching.
Jay Neveloff is a partner at Kramer Levin Naftalis & Frankel whose practice is focused on real estate and other commercial transactions. His past and present client list includes Starwood Hotels, the owners of Starrett City, New York Life Insurance Co. and the Trump Organization. Mr. Neveloff spoke to The Commercial Observer last week about how land-use issues have evolved in the city over the past 10 years.