Looking Ahead: What to Expect in 2023
With the soaring real estate market continuing well into 2022 to abruptly shift by Q3 2022, parties engaged in property have enormous challenges to understand and adjust to the changing conditions. Our Real Estate team has seen the beginning of the broad spectrum of market reactions to increased interest rates, but there is more to the picture for 2023 than just that. We expect our clients to experience the cascading effects of an abruptly shifting ecosystem for both New York based real estate real property concerns and investors, landlords, tenants, and related parties. Litigation over subcontracts, return to work and hybrid working office space changes, business districts and large infrastructure project changes, environmental statutes like Local Law 97 concerns, and a host of other outgrowths of a new political dynamic and a drastically different interest rate environment will continue well into 2023.
Our Condemnation practice’s work for governmental clients who acquire property through condemnation this past year examined in great detail and interpret the impact of railroad easements dating back nearly a century conveying rights to operate a railroad in Manhattan to certain limiting elevations formed by inclined planes and to evaluate overbuild rights, ventilation obligations and the legal impact of lost filed maps, among other issues. We expect these questions to continue given the continued plans to redevelop New York’s Pennsylvania Station and its environs, the Willets Point stadium and property redevelopment, the announced casino license bids and numerous other large-scale projects for the City’s redevelopment programs touching on decades–and in some cases, centuries—of building rights.
Thought Leadership and Advisories
- Hotels Now Require a Special Permit in New York City; Tourism is Rebounding
A valuable update on the implications of the New York City statutes that have been updated relating to hotel permitting.
- Local Law 97: Q&A for Property Owners, Including Commercial Landlords, on NYC’s Groundbreaking Climate Change Law
Carter Ledyard’s sweeping review of LL97 begins here.
- We helped the City of New York in negotiations with Amtrak to secure changes to railroad easements dating back nearly one hundred years in on order to facilitate development above the railroad right-of-way while preserving the right of the railroad to meet modern operational requirements. These negotiations included dealing with three dimensional surveys, modern ventilation and emergency requirements, modern equipment and developing creative ways to work around missing easement documents.
- Roosevelt Island Operating Corporation in a long-term ground lease to the Hudson Companies and the Related Companies on Roosevelt Island. This lease, representing the last of nine buildings to be constructed in the Southtown Community on Roosevelt Island, will be used to construct a 357-unit residential building, with 104 of the units to be used by Memorial Sloan Kettering Cancer Center for workforce housing.
- Restructuring of a multiple party $150 loan syndication in connection with a Class A million square foot office tower in Chicago. The restructuring included bringing in a second class of lender parties primarily to fund committed tenant improvement work.
- Completed $35 million C Pace financing documentation for energy savings and related improvements in a Class A office building in Chicago.
- Proud of our ongoing representation of a New York municipality with extensive ocean front areas in lawsuits involving the interpretation and enforcement of easements permitting renourishment of sand dunes while preventing development which would interfere with the functioning of protective dunes. This representation has led to groundbreaking trial court decisions interpreting such easements.
- We were asked by a client to evaluate whether standard deed conveyance language transferring the appurtenances and all rights of the transferor in condemned property led to unwitting transfers of condemnation claims pending when the property was transferred.
New Partner Announcement
Carter Ledyard welcomes Robert G. Koen as partner in the Real Estate Department. Bob joins from Mintz Levin where his practice focused on real estate transactions. He is a one of the real estate industry’s most prominent attorneys and will continue to focus on commercial real estate acquisitions, complex financing and restructurings.
Bob has extensive experience in a wide variety of real estate transactions in the negotiation, structuring, and documentation of acquisitions, dispositions, and co-investment transactions; the structuring of real estate joint ventures and partnerships; commercial lending, including conventional loan transactions; construction lending; preferred equity investments and mezzanine financings; hotel acquisition, financings, and development; commercial project development (including land development and negotiation of construction and development joint venture agreements); and real estate loan and investment workouts and restructurings.
Bob is the editor of the Real Estate Finance Journal, one of the industry’s most prominent quarterly publications featuring insights and analyses from highly recognized lawyers and professionals.