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In a market weathering unprecedented change, companies involved in high-stakes real estate deals need a steady, trusted hand to guide them. They also need counsel who can help them find new solutions for tough new challenges. The Paul, Weiss Real Estate Department offers clients the best of both worlds. Our long history of executing every kind of deal touching real property and our business and legal savvy help the most complex real estate projects succeed in fluctuating economic conditions.
Our clients include developers, lenders, institutional and entrepreneurial investors and governmental entities in the development of complex, large-scale real estate projects throughout New York City, the nation and the world. We represent them in all aspects of project development, including land assemblage and acquisition, joint venture structuring and equity financing, construction and first mortgage financing, project development agreements and the leasing and management of project space. Our experience covers new construction and renovations of all asset classes - hotels, office buildings, shopping centers, sports arenas, theme parks and entertainment complexes, planned communities and residential and mixed-use projects of all types and sizes.
Representative development experience has included:
- Metropolitan Transportation Authority (MTA) in negotiating a $1 billion agreement with a joint venture of real estate developer Related Companies and the Ontario Municipal Employees Retirement System to develop the largest undeveloped tracts of land in Manhattan - the West Side Railyards, two 13-acre sites owned by the MTA. We also represented the MTA in the sale to Forest City Ratner of the air space development rights over the MTA's Vanderbilt Railyards to be included in the multibillion-dollar Atlantic Yards development project.
- Las Vegas Sands, the owner of The Venetian and The Palazzo gaming resorts in Las Vegas and The Sands Macau and The Venetian Macau in Macau, in connection with all of its financings, developments, sales, joint ventures and other material transactions in the United States, Macau and Singapore since 1995; most recently, we assisted Las Vegas Sands in negotiating a joint venture agreement with local partners and obtaining the financing to develop "Sands Bethworks," a gaming, hotel, retail and museum complex on the site of the former Bethlehem Steel plant in Pennsylvania.
- Douglaston Development, an affiliate of Levine Builders, in connection with the development of The Edge, a two-phased, mixed-use project on the waterfront in Williamsburg, Brooklyn, that includes a water taxi landing, piers and an esplanade. The Edge will consist of 347 moderate-income rental apartments, 1,100 luxury condos, 60,000 square feet of retail space and parking garage space for more than 600 cars.
- Rockefeller Group and TDCDevelopment & Construction, a joint venture group, in contracting to acquire and develop a five-acre site in downtown Flushing, Queens; the proposed $850 million Flushing Commons development will create a 1.7-million-square-foot "town center," including residential condominiums, retail space, office and/or hotel space, a 1,600-car underground parking facility, a state-of-the-art YMCA and a landscaped central plaza.
- City University of New York in a three-party transaction with The Brodsky Organization and The New York Community Trust to develop a new state-of-the-art facility for the Hunter School of Social Work and the sale for residential development of the former Hunter facility site.
- AvalonBay Communities, a major national apartment REIT, in the development and financing and joint venture ownership of a four-building, 720-unit housing, retail and community facility development in lower Manhattan, the client's first entry into the Manhattan market.
- Allied Partners in connection with both the acquisition of various properties and restructuring existing properties for a major development facing Bryant Park in New York City.
- Vornado Realty Trust regarding landmarks issues in the retail redevelopment of 510 Fifth Avenue, a five-story modernist landmark building designed by Skidmore, Owings & Merrill and completed in 1954 for Manufacturers Trust Company.
- Lincoln Center Theater, as they entered into agreements with Lincoln Center for the Performing Arts, Inc. and The New York Public Library for the construction of the new Claire Tow Theater, on the rooftop of the building (shared by Lincoln Center Theater and the Library) which currently houses the Vivian Beaumont and Mitzi Newhouse Theaters.
Sales and Acquisitions
Buyers and sellers of all kinds and from all parts of the world look to Paul, Weiss's Real Estate Department to represent them in transactions involving sales and acquisitions of major properties of every asset class on both a portfolio and individual property basis. We are experienced in the specialized requirements of transactions involving hotels and resorts, office buildings, shopping centers, hospitals and nursing homes, residential buildings and air and development rights. We structure deals to meet the special requirements of REITs and Employee Retirement Income Security Act-driven transaction parties and to create tax-free exchanges in a variety of assets and investment structures. We have extensive experience in forming and acquiring commercial condominiums. Our experience also includes the acquisition of property from public agencies as well as through bankruptcy court, loan to own and other distressed-property vehicles.
Representative sales and acquisitions experience has included:
- Prime Outlets Acquisition and affiliated entities in the $2.325 billion sale of its outlet shopping center business to Simon Property Group, the largest public U.S. real estate company, including assumption of existing indebtedness and preferred stock.
- American Stock Exchange's Former Member Corporation in the sale of the historic headquarters of the American Stock Exchange in Lower Manhattan.
- Memorial Sloan-Kettering Cancer Center (MSKCC), in closing on the former Cabrini Medical Center for $83.1 million. The building, a 455-bed hospital, will be renovated into an outpatient cancer center for MSKCC. We also represented MSKCC in the proposed development of New York State's first proton center to treat cancer patients.
- Rose Smart Growth Investment Fund in the acquisition of ten buildings containing affordable housing and retail space in New York's Harlem neighborhood.
- NRDC Equity Partners in the acquisition of Hudson's Bay, Canada's largest retailer and North America's oldest company, as well as recapitalization of retailers Lord & Taylor and Fortunoff; the combined company has revenues of more than $8 billion and controls 55 million square feet of space in North America.
- TowerCo in the acquisitions, leasing and operating agreements for thousands of cellular towers throughout North America, Europe and Africa.
- The Shubert Organization in numerous sales of thousands of square feet of theater development rights for development throughout Manhattan's West Side.
Workouts and Restructurings
We restructure debt and equity positions for both lenders and borrowers on single assets and entire portfolios of all types and classes of properties. With colleagues in our bankruptcy, litigation, structured finance and tax practices, we are well-versed in the legal and practical aspects of the workout, foreclosure and bankruptcy processes in both domestic and international jurisdictions. We creatively structure transfers of control and of assets in satisfaction of debt to maximize the flexibility and effectiveness of the workout process, including the restructuring of debt and equity in vehicles that are tax-efficient for lenders and borrowers. We represented many of our private equity and hedge fund clients, with billions of dollars in assets under management, in exploring strategic real estate investment opportunities and in purchasing distressed real estate debt.
Representative loan workout and restructuring experience has included:
- Citigroup in the restructuring of its mortgage loan on the Chrysler headquarters in Auburn Hills, Michigan, and in the restructuring of mortgage and mezzanine loans to subsidiaries and principals of The Pyramid Companies secured by the Carousel Center Mall in Syracuse, New York, and the Destiny USA expansion to the mall.
- Miami's Fontainebleau Resort in its successful out-of-court restructuring of over $800 million in debt and other secured claims. The restructuring capped almost a year of negotiations with the company's senior lenders (with different groups of lenders holding the four senior loan tranches), mezzanine lender, equity holders and over 150 contractors who worked on the hotel's elaborate renovation. The joint venture equity partners are the Soffer family and the real estate arm of Dubai World.
- Madison Capital Management in the successful negotiated restructuring of $505 million of mortgage and mezzanine construction debt for The W South Beach. Madison holds a subordinated tranche of the mortgage debt.
- Gemini Real Estate Advisors in connection with the refinancing of mortgage and mezzanine loans secured by the Wyndham Garden Hotel, Chelsea West. We represented affiliates of Gemini Real Estate Advisors in connection with a loan facility secured by a pledge of a pool mortgage loan involving three New York City hotels and a retail property in Minnesota.
- Zurich Alternative Asset Management in the fair market rent reappraisal under a ground lease at 111 Wall Street, one of the first arbitrations testing the effects of the economic crisis on Manhattan real estate values.
- Stuyvesant Town Peter Cooper Village Tenants Association in the proposed acquisition and recapitalization of $3 billion first mortgage financing following the default and foreclosure of the Tishman Speyer-led venture.
- Capmark Investments in restructuring a resort land development loan secured by a project on the Kona Coast of the Big Island of Hawaii.
- American High Income Capital in its capacity as a member of the official committee of unsecured creditors appointed in the General Growth Properties bankruptcy proceeding. We represented an ad hoc committee of holders of the $2.2 billion bonds issued by Rouse in connection with a pre-bankruptcy effort to achieve an out-of-court restructuring of Rouse/General Growth Properties.
Representative dispute resolution experience has included:
- H. Henry Elghanayan in connection with the separation of assets and restructuring of the ownership and operations of Rockrose Development.
- SL Green in disputes with joint venture partners on various office properties in Midtown Manhattan as well as development properties in upstate New York.
- The Shubert Foundation in negotiations to reset the ground rent under a major office building in midtown Manhattan to fair market value.
- An Upper East Side Property Owner in connection with the reset of the rent under a long-term ground lease to a residential cooperative. A new rental rate and a related extension of the lease term through the year 2107 were achieved by negotiated agreement, without the need for arbitration.
- North Shore Towers Partnership in an appointment by federal district court as special master to oversee the resolution of a complex partnership dispute concerning an $800 million residential cooperative development.
- Murray Hill in connection with the buyout of an institutional joint venture partner in the land and building at a major Manhattan office building and the discounted purchase of outstanding mezzanine financing.
- Sol Goldman Investments in numerous matters relating to ground lease administration and renegotiations at numerous properties throughout New York City.
Borrowers and lenders in all types of sophisticated loan, sale-leaseback and securitization transactions select us as real estate counsel. Our experience includes construction loans, permanent loans, portfolio loans, public and private securities offerings, bond financings, synthetic and leveraged leases and interim and bridge loans. We handle secured and unsecured lending and borrowing for a wide variety of clients involving diverse asset classes.
On the lender side, our clients include major insurance companies, foreign and domestic banks, investment banks, pension funds and advisers, real estate investment trusts and other institutional lenders and investors. On the borrower side, we represent developer, investor and owner clients in obtaining sophisticated financing to maximize their leverage and the value of their assets.
Representative lender experience has included:
- SL Green Realty, the largest owner of New York City office space, in its joint venture transaction to recapitalize the office building at 1775 Broadway. We also represented SL Green in connection with acquisition of four mezzanine loans representing total debt of more than $250 million secured by ownership interests in a major Park Avenue office building, and in connection with its rights as mezzanine and subordinate mortgage lender to various entities that own 530 Fifth Avenue.
- U.S. Department of Energy (DOE) in its $1.4 billion loan for Nissan North America and $465 million loan for Tesla Motors to build or retool manufacturing facilities in Tennessee and California for the production of all-electric vehicles and related components, as part of DOE's $25 billion Advanced Technology Vehicles Manufacturing loan program.
- Intrawest, a developer and operator of numerous ski resorts across North America, including Whistler/Blackcomb, Steamboat, Mont Tremblant, Stratton and Snowshoe, in connection with the refinancing of $1.7 billion of Intrawest's debt. The obligations under these loan facilities were secured by substantially all of Intrawest's material real estate holdings in the U.S. and Canada.
- GMAC Commercial Mortgage as the lead construction and sole mezzanine lender in the $1.4 billion financing for Time Warner Center; the financing for The New York Times headquarters building; and the $250 million construction financing for Boston's One Lincoln Street; we also have represented the Commercial Ventures group of GMAC as originator of a $335 million sale-leaseback financing on Lucent Technologies' headquarters and the securitization of the loan, and a $60 million mezzanine loan to a joint venture affiliate of Reckson secured by a portfolio of student housing, resort and tollway service area properties.
- Goldman Sachs Mortgage in originating securitized and interim mortgage loans made by Goldman Sachs on a single-asset and a portfolio basis.
- The Equitable Companies in originating conventional and participating loan transactions involving shopping centers, hotels, office buildings and industrial properties.
- Property Capital Trust, a first-generation public real estate investment trust, in hundreds of sale-leaseback financing transactions on shopping centers, hotels, office buildings and apartment complexes, including structuring for tax-exempt investors.
Representative borrower experience has included:
- Las Vegas Sands and its subsidiaries in a $5 billion senior secured credit facility used to refinance existing bank loans, construction loans and commercial mortgage-backed security financing. Future proceeds will be used to fund the development and construction of new gaming, hotel, retail, convention center and residential condominium projects.
- Great Wolf Resorts in a $230 million securities offering. Deutsche Bank Securities, Bank of America Merrill Lynch, Wells Fargo Securities and Crédit Agricole CIB were the initial purchasers. The notes were guaranteed by certain of Great Wolf's subsidiaries and secured by first priority mortgages on Great Wolf's resorts in Grapevine, Texas; Mason, Ohio and Williamsburg, Virginia; and other assets of the subsidiaries holding those resorts.
- Bon-Ton Stores, a public company that operates 278 regional department stores in 23 states, in a $675 million senior secured revolving credit facility and a $75 million second lien term loan facility.
- SL Green and the PRISA Fund in one of the few major commercial real estate financings consummated in 2009; we represented this joint venture in a $215 million mortgage loan refinancing secured by the office building located at 100 Park Avenue.
- Daewoo and Trump Organization in a $360 million joint venture for construction and permanent financing of the Trump World Tower condominium and an additional $106 million in financing of developer units.
- The Miami Heat, an NBA franchise, and the related arena development company in a $220 million sports arena financing, including a Rule 144A offering of insured senior term notes and sales tax revenue-backed municipal notes.
- Muss Development in the construction and permanent financing of the 286-room expansion of the Marriott Hotel at the Brooklyn Bridge.
Our clients include both major landlords and tenants - including Fortune 500 corporations, law firms, brokerage and accounting firms and media and entertainment firms - in a wide range of office, retail and ground lease transactions. We understand very well the complex technical and financial issues involved in office leases and are experienced in structuring financial and performance protections for all participants.
- Law Firm Leases, including the two largest 2009 lease transactions in Manhattan. We represented our firm as tenant in our 15-year renewal of our 550,000-square-foot headquarters space in midtown Manhattan, as well as the landlord in the 10-year renewal of Stroock & Stroock & Lavan's lease of 250,000 square feet in the Financial District.
- Headquarters Leases for major corporate tenants, including VICE.com, ITT, Time Warner, NASDAQ, Warner Music, EMI, Home Box Office, ATC Management/Food Network, Continental Grain Company, The Daily Racing Form, Major League Baseball, AFYA Foundation, Wasserstein & Company, Zagat Survey, Colgate-Palmolive Company, Sumitomo Corporation, Core Media and Fedcap Rehabilitation Services.
- Retail Leases for urban flagship and shopping center store leases for landlords and tenants, including Calvin Klein, Polo Ralph Lauren (now Ralph Lauren), Versace, Sega GameWorks, Loews Cineplex Theaters, South Street Seaport, Faneuil Hall Marketplace, New 42nd Street, Macklowe Organization, KIK Custom Products, Cry Havoc, Credit Suisse First Boston and MTA/Grand Central Terminal.
- Ground and Net Leases for major projects, including the Bloomingdale's land and building in Manhattan, the Four Seasons Hotel New York, the W New York-Times Square hotel, the Marriott Brooklyn Hotel, the New 42nd Street Theaters and Hilton Times Square Hotel, Queens West Development Project, Gramercy Park Hotel and the Seventh Regiment Armory.
- Office-Leasing Programs for major New York office landlords, including the Macklowe Organization, Credit Suisse First Boston, Park Tower Associates and Sheldon Solow.
Representative leasing experience has included:
- Murray Hill Properties, a long-time client, in a number of significant leasing transactions each year. This year, in particular, we advised Murray Hill in connection with its own move to new premises at 277 Park Avenue, New York and with PepsiCo's renewal and expansion of its headquarters lease at 1 Pepsi Way, Somers, New York. PepsiCo will now demise the entire 540,000 rentable square foot office building. We also handled all of the leasing work at 1180 Avenue of the Americas, including the renewal and expansion of numerous occupancies in the building.
- Time Inc. and Time Warner as they restructured their midtown Manhattan office space needs at 1271 Avenue of the Americas (the Time & Life Building) and at 75 Rockefeller Plaza. Recently, we helped the client enter into several high-profile subleases, including to hedge fund Advent Capital, on-line trader E*Trade Financial, credit bureau Experian, and market research firm Ipsos.
- General Atlantic in a sub-sublease at 55 East 52nd Street in Midtown Manhattan to an investment firm. As expected in a sub-sublease transaction, the four-sided negotiations among the fee owner, the sublandlord, the subtenant and the sub-subtenant involved a complex web of inter-relationships and requirements, and, in this case, an especially difficult balancing of renovation details.
- A Midtown New York Hotel Property, a joint venture among several families, as we helped structure and implement a 75-year transaction with an international hospitality management company and investors in a property close to Grand Central Terminal. This new arrangement will enable the facility to be renovated and reopened as a first-class hotel.
- Cooper Union in a long-term ground lease to Minskoff Properties for development of a parcel owned by Cooper Union near its main Manhattan campus.
- Doosan, a Korean conglomerate, in leasing headquarters and operating space in New York and New Jersey.
Joint Ventures and Real Estate Investment Funds
Paul, Weiss represents a wide variety of clients for whom we negotiate and document joint ventures and form real estate investment funds for the development, ownership and operation of all classes of real estate assets. We are equally adept at representing the developer or operating partner, fund sponsor and the equity investor partner. We understand how to structure deals to meet the requirements of institutional investors, opportunity funds and governmental entities. And when disputes arise among joint venture partners, we counsel our clients in dispute resolution and exit strategies. We have experience in high-profile joint venture and investor disputes of all types. We negotiate and, where necessary, litigate creative exit and dispute resolution strategies for joint owners of major properties.
Representative joint venture and investment fund experience has included:
- Whitehall Real Estate Fund in a joint venture with Westmont Hospitality Group for the acquisition of a portfolio of hotel properties.
- Monday Properties in a joint venture with Lehman Brothers for the acquisition and financing of the $1.2 billion Rosslyn, Virginia, 12-building office portfolio.
- Oak Hill, MeriStar Hotels and Interstate Hotels in a joint venture to acquire and manage a portfolio of hospitality properties.
- Goldman Properties in a joint venture with Rockefeller Properties and Tishman Speyer Properties in the ownership of Rockefeller Center.
- Sol Goldman Investments and BLDG Properties in a joint venture with Silverstein Properties in the ownership of a 99-year leasehold interest in the World Trade Center.
- Murray Hill in joint ventures with numerous financial partners in the ownership of Manhattan office properties.
In conjunction with our investment funds group, the Paul, Weiss Real Estate Department also advises clients in the formation of real estate investment funds for the development, ownership and operation of all classes of real estate assets. Recent representations have included:
- IREO, a $1.6 billion family of funds that invests in Indian real estate.
- Emerging Markets Real Estate Funds, an $846 million fund managed by the Hines organization and Trust Company of the West.
- Rose Smart Growth Investment Fund, an owner and operator of a national portfolio of green, socially responsible buildings in smart-growth, mass-transit accessible locations; its assets include affordable multifamily housing.
- Iron Point Real Estate Partners, a $350 million fund that invests in a wide variety of real estate and related assets.
- Quinlan, investing primarily in commercial real estate located in Western, Central and Eastern Europe.
- Rockefeller Foundation, investing in real estate investment funds.
- JPMorgan, investing in real estate and other funds.
- AREA/Apollo in the formation of a $250 million fund to invest in New York real estate.
International Real Estate
A variety of clients hire us to help them consummate real estate transactions outside the United States. We represent American and European investors in overseas ownership and development joint ventures as well as local venture partners and governments in sophisticated transactions with foreign investors. We also represent international investors in U.S.-based joint ventures to own and operate properties within the United States. Through our offices in London, Hong Kong and Tokyo and with our extensive international network of "relationship" firms, we combine our real estate knowledge and deal-making skills with local expertise to service transactions anywhere in the world.
Representative international experience has included:
- Las Vegas Sands in connection with various international projects. Our work in 2009 included various tasks in connection with the development of the Marina Bay Sands Integrated Resort in Singapore, which will include hotel, gaming, retail, convention center and cultural components and will be the only gaming facility on the Singapore mainland; the development and contemplated sale of Four Seasons private residences in Macau; amendments to Las Vegas Sands' existing $3.3 billion Macau credit facility and negotiations in connection with a contemplated new $1.75 billion construction loan for the development of additional casino resorts on the Cotai Strip in Macau.
- Government of Hong Kong in joint venture development, financing and land reclamation and infrastructure agreements with Disney for Hong Kong Disneyland.
- Cell C (Pty) Ltd in the sale of up to 1,400 of its existing communications towers and up to 1,800 additional communications towers that are either under construction or will be constructed, to American Tower Corporation for an aggregate purchase price of approximately $430 million. This precedent-setting transaction is the first large sale-leaseback of communications towers to be announced in South Africa. Cell C, with more than seven million subscribers, will be an anchor tenant on each of the towers purchased.
- Millicom International Cellular S.A. in its sale of approximately 750 telecommunications towers to Helios Towers Ghana. We also represented Millicom in sale agreements for approximately 1,020 communications towers to Helios Towers Tanzania and approximately 730 communications towers to Helios Towers DRC in the Democratic Republic of Congo. All three transactions include long-term leasing agreements at closing whereby Helios will provide our client access to wireless communications towers and build-to-suit agreements to support the company's wireless network expansions.
- IREO, a leading real estate developer in India, in a variety of transactions, including joint ventures with Indian developers and other strategic partners. Earlier this year, IREO and Ascendas India Development Trust, the Indian arm of one of Asia's largest commercial property companies, Ascendas, formed multiple joint ventures to develop properties in India. Among the properties to be developed through the joint ventures are a large-scale, mixed-use project in Chennai and a mixed-use project and Special Economic Zone comprising more than 4 million square feet of prospective development in Coimbatore. In aggregate, IREO has committed nearly $1.5 billion to 14 announced projects across India, including large-scale residential and mixed-use development projects in the Delhi region, Punjab, the Goa region, Pune and parts of Southern India, among other areas. IREO also raised the first foreign fund focused on real estate in India.
- InterPacific Group in connection with the sale of the Vaima Center, a waterfront shopping center in Tahiti.
- Governments of Osaka and Shanghai in joint venture development, financing and infrastructure arrangements with Universal Studios for Universal Studios Osaka and Universal Studios Shanghai.
- Daewoo and Trump Organization in a joint venture to develop multiple luxury condominium complexes in South Korea.