Real Estate Joint Ventures: Issues to address in creating an effective partnership

Jay A. Neveloff | Kramer Levin Naftalis & Frankel LLP

Jay A. Neveloff advises a broad range of clients involved with the development, ownership and financing of real estate projects, including high-profile mixed-use, commercial, retail, and residential projects in New York City and throughout the country. A nationally recognized transactional lawyer, Jay represents institutional and private equity funds, as well as other investors and owners, in joint ventures, the acquisition and sale of property, including portfolios of properties, and in connection with a broad variety of developments. He also represents major international funds and financial institutions in commercial lending transactions, preferred equity investments, loan restructurings and workouts.

Jay’s most notable transactions include high-profile projects in New York City, such as the Disney-ABC, representing the company in the sale of its primary New York City campus and in the relocation of its New York headquarters to a 1.2-million-square-foot complex with office and studio space being developed in Tribeca; Waldorf Astoria, representing the owner in several aspects; The Nederlander Organization in the creative TSX Development involving lifting its landmarked Palace Theater to create retail frontage on Times Square and to unify signage; the acquisitions of 452 5th Ave. and 576 5th Ave.; CIM in the development of 432 Park Ave. and related matters; multiple parties involved in the development and financing of Central Park Tower; and Time Warner Center, representing Related-Apollo in the $1.7 billion development of the premier mixed-use complex in Columbus Circle. He also led the sale of Stribling & Associates to Compass and the sale of The Sunshine Group to NRT Corcoran.

In another notable and unique project, Jay represents an owner of Broadway theaters in the sale involving a mixed-use building in Times Square, in which the seller retained ownership of the landmarked theater currently at street level. As part of the purchaser’s redevelopment of the property, the purchaser intends to lift the theater by up to 30 feet above its current location to allow for retail space at street level, and will renovate the theater for the seller.

Jay has played an integral role in advancing state and local legislative and policy changes on behalf of clients, including representing the owner of multiple large residential complexes and the owner and developer of major sports entertainment venues. He has had significant involvement in the adoption of federal and state legislation, including the adoption of amended Section 365(h) of the U.S. Bankruptcy Code (preserving the integrity of leasehold financings), the limitations enacted in 2016 regarding the Interstate Land Full Disclosure Act and other property-specific legislation, as well as New York State executive orders relating to the impact of the COVID-19 pandemic on real estate, and is regularly invited to review and comment upon, often in advance, pending New York State legislation related to real estate.

On a national scale, Jay has facilitated the development of numerous regional and local shopping centers and other commercial projects throughout the country. He represented the owners of Starrett City, the largest federally subsidized housing complex in the United States, in a major capital transaction; represented the previous operator of Stuyvesant Town in a variety of matters; and guided the sale of a major casino hotel in Las Vegas on behalf of the owners.

Jay has been ranked in Tier 1 for Real Estate by Chambers every year for more than 15 years. According to Chambers sources, Jay’s “industry knowledge and experience is unparalleled,” “is simply one of the most connected real estate people … in the market,” and he “provides very effective representation and is very pleasant to work with.” Jay has been described as “a brilliant and dynamic individual,” “impressive — really sharp and very commercial,” “one of the best real estate lawyers in New York” and “a phenomenal and very, very creative attorney.” Lauded by clients as “one of our most trusted advisers,” Jay “is incredibly responsive and committed to client care. He understands client needs and helps develop practical solutions.” Clients appreciate that “he looks after his clients, is always available and responsive, and is very knowledgeable in the business.” One client recently noted to Chambers that “his sage advice on complicated deals is highly valued within our firm.”

Andrew Charles | Kramer Levin Naftalis & Frankel LLP

Andrew Charles has extensive experience in all aspects of commercial real estate law, including partnerships and joint ventures, sales and acquisitions, financing for borrowers and lenders, and development and leasing. Andrew’s principal focus is on designing platforms and structuring transactions for institutional investors and opportunity funds such as joint ventures (including programmatic joint ventures), preferred equity investments, and mixed debt/equity investments. As such, Andrew is a sought-after advisor known for guiding market-leading transactions, including, among others, representing Mitsui Fudosan America, Inc. in a joint venture with the Related Companies and Oxford Properties Group in the acquisition and development of 50 Hudson Yards and 55 Hudson Yards, located at the intersection of Hudson Yards, the High Line, and Hudson Yards boulevards, New York City.

Represented Mitsui Fudosan America, Inc. in entering in to a joint venture with Related Companies and Oxford Properties Group for the acquisition and development of 55 Hudson Yards, located at the intersection of Hudson Yards, the High Line and Hudson and Park Boulevard, New York City.

Represented Mitsui Fudosan America Inc. in connection with entering into a joint venture with Taconic Investment Partners for the purpose of acquiring, financing and developing a mixed use development consisting of 466,000 square feet for 392 residential units and approximately 30,000 square feet of retail space located at 525 West 52nd St.

Represented Broadview Real Estate Partners in negotiating a programmatic joint venture with Winterpast Capital Partners for the purpose of acquiring senior living facilities in the southeast United States.

Represented Mitsui Fudosan America, Inc. in a joint venture with EYA and JBG Smith for the development of Robinson Landing, a mixed-use development consisting of 26 townhomes, 70 residential condominiums, retail and dining, and community space on the waterfront in Alexandria, VA.

Represented Mitsui Fudosan America, Inc. in a joint venture with The Related Companies for the acquisition and development of a 6.5-acre parcel in the Seaport Innovation District of Boston for a mixed-use development consisting of approximately 735,000 square feet of office and life sciences space, as well as residential, retail and dining spaces and three acres of open space.

Represented Mitsui Fudosan America, Inc. in a joint venture with The Related Companies for the acquisition and redevelopment of a 2.3-acre parcel in Boston known as “Innovation Square Phase 2” for a mixed-use development consisting of an approximately 265,000-square-foot life sciences building.

Represented Mitsui Fudosan America, Inc. in a joint venture with Tishman Speyer for the acquisition and development of Brannan Square, a commercial complex of three independent buildings totaling approximately 1.2 million square feet of floor space in the SoMa neighborhood of San Francisco.

Represented Mitsui Fudosan America, Inc. in a joint venture with Wood Partners for the acquisition and development of a 1.1-acre parcel in Los Angeles, on which will be constructed a mixed-use residential apartment rental unit complex with approximately 132,786 square feet of residential space for 161 units and approximately 5,723 square feet of commercial space.

Represented Mitsui Fudosan America, Inc. in a joint venture with Wood Partners for the acquisition and development of a 1.65-acre parcel in the Assembly Row development in Somerville, MA, on which will be constructed an approximately 264,000-net- square-foot residential apartment rental unit complex with 329 units as well as approximately 10,836 square feet of retail space.

I. Formation and Structure | 10:00am – 10:05am

II. The Term Sheet | 10:05am – 10:10am

III. Capital Contributions and Capital Calls | 10:10am – 10:15am

IV. Distributions and Promote Payments | 10:15am – 10:20am

V. Choosing a Management Structure | 10:20am – 10:25am

VI. Major Decisions | 10:25am – 10:30am

VII. Developer/Manager Defaults/Removal Rights | 10:30am – 10:35am

VIII. Consequences of Manager Removal | 10:35am – 10:40am

IX. Exclusivity and Non-Compete Provisions | 10:40am – 10:45am

X. Transfer Rights/Restrictions: Developer/Manager Member | 10:45am – 10:50am

XI. Transfer Rights/Restrictions: Investor Member | 10:50am – 10:55am

XII. Other Transfer Provisions/Exit Opportunities | 10:55am – 11:00am

Break | 11:00am – 11:10am

XIII. Related Party Agreements | 11:10am – 11:20am

XIV. Guaranties | 11:20am – 11:30am

XV. Drafting Tips | 11:30am – 11:40am