Northwest Real Estate Law Blog : Northwest Real Estate Lawyer & Attorney : Davis Wright Tremaine Law Firm : Land Use, Development, Commercial Property : Seattle, Portland, Alaska, Washington, Oregon

Authored by: Karen Thiessen

As originally published in Daily Journal of Commerce

Folks in the hotel or restaurant industry are probably very familiar by now with “radius restrictions.” These requests are increasingly being included in contracts by landlords in commercial leases, owners in management agreements (such as for hotels, restaurants, theaters or other venues operated on behalf of the owner for a fee), and licensees in brand franchise agreements.

The restrictions typically limit the tenant, manager or licensor from opening, operating, permitting or otherwise engaging in their business in another location within a certain radius or area, known as the area of protection (or AOP).

When encountering a proposed radius restriction clause, negotiate carefully. While many radius restrictions are reasonable, they can easily become overbroad. A savvy “restricted party” will think beyond only present operations to how the radius restriction may impact other business opportunities.

Continue Reading...

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Authored by:  Clayton Graham and Jim Greenfield

Many Seattle landlords and other building owners will soon need to begin reporting on the energy efficiency of their buildings. As reported in DWT’s Northwest Real Estate Blog last year, a Seattle ordinance passed in connection with the state’s Efficiency First! Act requires many Seattle building owners to provide “energy benchmarking reports” to the Director of the Department of Planning & Development using the federal Environmental Protection Agency’s Energy Star Portfolio Manager or a similar system. 

Continue Reading...

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Authored by: Jim Reinhart

As published in the Daily Journal of Commerce

How should a potential tenant decide which building to select for office space? Rental rate, incentives, class of space, location and tenant improvements make the usual list of important factors. In this competitive market, landlords are paying more attention to how they can differentiate their office space from the building down the street. One inventive way is to allow pets.

Portland has a few pet-friendly office buildings. Wieden + Kennedy, recognized for its originality, is known for the dogs in its building. Both its employees and its tenants can bring their dogs into the office. Despite a lack of policy, Portland’s EcoTrust Building has many dogs inside. Most buildings expressly do not allow pets, but that is changing around the country and in the Portland-metropolitan area.

Continue Reading...

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

Authored by: Tom Hillier

As published in the Daily Journal of Commerce

In many commercial transactions involving the lease or sale of real property, the first document drafted by the parties to evidence the agreement terms is a letter of intent. Generally speaking, the letter of intent is simply an expression of the parties’ intent to proceed with formal documentation of the transaction and is not intended to be binding. So, why use an LOI?

Commercial real estate transactions are usually complex matters with many terms to negotiate. Parties use the LOI for two basic purposes.

Continue Reading...

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Authored by: John Hanley

Last year we reported in advisories directed to our health care (see advisory) and real estate (see advisory) readers that the Financial Accounting Standards Board (FASB) is considering new accounting rules for real estate and equipment leases, new rules that would dramatically change the way in which leases are reported in financial statements of public and private companies and nonprofit organizations. The proposed rules were published in an Exposure Draft (Topic 840-Leases) released by the FASB in August 2010.

It now appears that the FASB may be ready to reverse course, and perhaps even to adhere to its current rules, which draw a bright line between capital and operating leases. We believe that those who have been preparing for the new rules may want to hold tight until the FASB’s direction becomes more certain.

Continue Reading...

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Authored by:  Alan Middleton

In a 5-4 decision, the Washington Supreme Court held that a 25-year lease subject to the Manufactured/Mobile Home Landlord-Tenant Act (MHLTA), RCW 59.20, does not violate the MHLTA's prohibition against restrictions on assignment, RCW 59.20.060(2)(d), .073(1), if the lease provides that the lease term is shortened to one or two years in the event of assignment. The lease did not otherwise limit a tenant's right to assign. The owner had offered 25-year leases to initial tenants at a low rental to obtain full occupancy of a new development. Although the development was not viable if all owners held their leases for the full 25-year term, the owner calculated that most owners would assign their leases before the 25-year term expired. The Court did not address the tenants' alternative argument that such leases violated the Consumer Protection Act, RCW 19.86, as the Court of Appeals had remanded the CPA claim for further factual findings. The majority and dissenting opinions in case, Little Mountain Estates Tenants Ass'n v. Little Mountain Estates MHC LLC, Case No. 82574-2, can be found here: [www.dwtrealestatelawnw.com/uploads/file/Little Mountain Dissent.pdf ; and www.dwtrealestatelawnw.com/uploads/file/Little Mountain Majority.pdf]

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Authored by:  Gene Grant

As published in The Daily Journal of Commerce

Vacancy rates for commercial space, already high, continue to increase. Traditional long-term tenants are in short supply. Out of necessity, landlords are inventing new occupancy arrangements. These creative solutions, however, often require special kinds of occupancy agreements. Common examples include pop-up stores, shared offices, government agencies, and donated space. For more information, see our recent article published in The Daily Journal of Commerce

• Email This
• Print
• Comments
• Trackbacks
• Share Link

 Authored by:  John Benazzi

"As published in Santé Magazine"

My brother, the chef, has been looking to open his own place for a number of years now. He tells me that when he finds the "perfect" space, he is going to jump on it. If that happens, I’m sure that I will get a call from my brother asking if I have time to review his lease. He will tell me that it’s the perfect space and that I only need to take a “quick look.” He will also probably tell me that because he’s taken my advice and set up his business as a limited liability entity, that the landlord wants him sign a personal guaranty. He will want to know what that means and whether he should sign it. Here’s what I’ll tell him:

Continue Reading...

• Email This
• Print
• Comments
• Trackbacks
• Share Link