Long Term Investment Analysis for Commercial Properties

The allocation of risk accomplished by indemnification agreements is often a hotly negotiated term of real estate contracts and leases and, when not negotiated, frequently are not in compliance with applicable state indemnification laws or do not reflect the basis axim that liability should follow control. Unbalanced indemnification provisions frequently arise from unbalanced negotiating positions. This panel will address the nuts and bolts of indemnification agreements and insurance contracts, analyzing how indemnification agreements require one party (the indemnitor), bear the risk of claims against the other party (the indemnitee) for loss and damages claimed by a third party. The role of insurance in providing a source of funds for indemnification obligations will be addressed. Indemnification and insurance provisions are standard requirements of PSAs, leases, and construction contracts. Standalone indemnity agreements are also frequently employed to balance the rights of a counterparty with its obligations. Informed counsel must recognize how to protect client interests by deftly structuring indemnification provisions, taking into account state law and respective risks and control in careful drafting. Listen as our authoritative panel discusses current trends and practical strategies in negotiating these provisions, as well as the advanced arguments made by the parties to these instruments.

In this next edition of the RISMedia Agent Webinar Series, sponsored by Homes.com and Quicken Loans, moderator Verl Workman talks tech with real estate pros Rob Levy and Rob Zwemmer and Mark Millar, VP of REALTOR® Relations for Quicken Loans, and Joe Sesso, national speaker and regional director for Homes.com. We'll cover the money-making methods these tech-savvy leaders use to drive success, including adopting tools that take the guesswork out of lead generation, producing eye-catching visuals with Instagram, optimizing your website for mobile users, augmenting your brand with live Periscope videos, and more!

In construction loans, the lender advances a small portion (or none) of the loan at closing since the proceeds are intended to fund construction costs as incurred. The conditions for advancing funds are often complicated because there are three participants--the lender, the borrower, and the contractor--and in part, because actual costs may vary from the construction budget. Most construction loan agreements provide for shifting cost savings for one item to another item in the budget. Construction budgets will usually incorporate "contingency" to be applied by the borrower to pay for cost overruns for items in the budget, subject to certain conditions. Documents must provide for retainage for unforeseen costs to ensure the completion of the project. A construction loan is unique for title insurance because disbursements are made post-closing, and property increases in value with each disbursement. Title insurance must be in place to cover the loan amount as it is funded. Counsel to the lender must structure the loan to ensure the priority of advances and procure title insurance (including appropriate endorsements at closing) consistent with that priority. Also, the borrower will typically need to obtain lien waivers or lien subordination as disbursements are made. Listen as our authoritative panel discusses the construction loan funding process and the need for increasing title insurance coverage as funds are disbursed. The panel will discuss budgeting and construction draw provisions in loan agreements, future advance clauses, and other practices for preserving the senior position of the mortgage over mechanic's liens and the title endorsements to obtain at closing.

The allocation of operating expenses in a commercial real estate lease is based on the lease structure involved, whether a net lease, triple net lease, gross or modified gross lease. Operating costs broadly include utilities, taxes, insurance, lease premise maintenance, common area maintenance and management expenses.