It is a common play in real estate to create a separate operating entity to serve as a tenant and execute a lease between the owner of the property and himself. Typically, this happens in assets which serve as a real estate-based business, such as a retail property. The structure enables the operator to reduce the taxable income of the business and also provide a liability shield for the property owner.
This arrangement can lead to some ethical issues should the property owner become distressed. For example, is the lease amount above market and therefore being used to inflate the property valuation? Is rent actually being paid? Is there a proper lease in place or just an internal handshake? Attorneys need to understand the set-up in order to know what is in bounds and what is outside the lines. This webinar looks at this leasing structure and examines the issues that may arise.
David Levy is Vice President of Business Development for NRC Realty & Capital Advisors. NRC conducts structured sales, sealed bid sales, and auctions of all types of real estate and… Read More
Beth Jo Zeitzer is the President and Designated Broker of R.O.I. Properties, a full service real estate firm focused on the enhancement of real estate assets. Services include Brokerage, Receivership,… Read More
Gordon Gouveia is a partner in Fox Rothschild LLP’s Financial Restructuring & Bankruptcy department with 15 years of experience working on insolvency-related matters. After graduating from Vanderbilt Law School in… Read More