Commercial Real Estate

Mostly in what the law supplies for free. A residential buyer in Illinois receives a statutory disclosure report from the seller, an implied warranty of habitability on new construction and a body of consumer law behind both. A commercial buyer receives the property as is, with only the representations negotiated into the contract, surviving only as long as the contract says and capped at the figure it names. Commercial leases have no implied warranty of habitability either, so a tenant's rights are the lease's text. The financing differs as well: commercial debt is usually non-recourse with carve-outs rather than a personal obligation. The practical result is that a commercial deal is won or lost in drafting and diligence, not at the closing table.

The whole life of the asset, from the letter of intent to the sale that ends the hold. On an acquisition or disposition that means the purchase agreement, the title and survey review, and the closing itself. On a leased building it means the leases, the amendments and the renewals that follow, and the landlord's side of every dispute. On the debt it means the loan documents, the guaranties and the refinancing when the term ends. The entities that hold the property are formed with the firm's corporate bench, and a matter that turns contentious moves to the litigation bench without changing partners.

Because the deal is decided in documents the parties rarely read closely until something goes wrong. The letter of intent fixes the price, the diligence period and the deposit terms, and what is conceded there is seldom recovered in the purchase agreement. The title commitment's Schedule B lists every easement, covenant and lien the buyer will take subject to, each of which has to be objected to by the contingency date or accepted for good. The survival and cap provisions decide how long the seller stands behind its statements. Counsel's job is to read those documents against each other and against the business plan, and to say plainly which risks have been priced, which have been shifted and which remain.

Most stabilized property is financed with a senior mortgage sized to a loan-to-value ceiling and a debt service coverage test, non-recourse to the borrower except for the carve-outs the guaranty lists. The documents then control the cash: a lockbox or cash management sweep that springs on a covenant breach, reserves for taxes and tenant improvements, and reporting the borrower must deliver every quarter. Prepayment is rarely free; yield maintenance or defeasance can make an early sale uneconomic for years. A construction loan funds in draws against lien waivers and inspections, with a completion guaranty behind it. Where the senior lender will not go high enough, mezzanine debt is secured by a pledge of the ownership interests, governed by an intercreditor agreement that decides who acts first in a default.

Yes, and the first question is settled before the contract goes hard: whether the intended use is permitted as of right, allowed only as a special use, or legal only because it predates the ordinance. A zoning verification letter from the municipality and the current certificate of occupancy answer it. A legal nonconforming use can be lost if it is discontinued for the period the ordinance sets, so a vacant building is a zoning risk as well as a leasing one. Where the plan requires a variance, a special use permit or a rezoning, the diligence period is negotiated to cover the hearing calendar, and the work moves to the firm's development and land use practice.

Yes. Ownership is a series of documents that keep arriving. New leases and amendments are negotiated against the loan covenants that restrict them. Operating expense reconciliations go out each spring and tenants audit them. A refinancing requires fresh estoppels and subordination agreements from every tenant. The assessor revalues the property on its cycle, and each reassessment is a decision whether to appeal. When the hold ends, a Section 1031 exchange needs its intermediary and its 45-day identification before the closing, not after. We keep the file through all of it so the building's legal history is in one place when it matters.