Real Estate

Real Estate Investment Trusts (REITs)

Our comprehensive REITS team, comprised of real estate and financing, securities law, and tax attorneys, handles REITs and those that transact business with REITS—sponsors, investors, operators, property managers, asset and investment managers, development partners, joint venture partners, tax exempt organizations, and lenders—across the full range of asset types, including office, industrial, multifamily, hospitality, health care, and assisted living and data centers. We are familiar with the potential tax and non-tax benefits of the REIT structure, as well as some of its complexities and shortcomings. We assist existing real estate companies in examining whether the REIT and UPREIT structures are appropriate vehicles for the monetization of their existing real estate portfolios, and we work with owners of operating businesses and their advisors to evaluate whether the contribution of some or all of their real estate assets to a REIT-ready structure is a proper vehicle for advancing the company's overall business objective.

Experience

The number of entities that have been structured as real estate investment trusts (REITs) has greatly expanded in recent years. The REIT team at Quarles & Brady recognizes the expanding needs of clients in this area and created a team that serves those needs.

We know that understanding how REITs work is critical to the success of these transactions. In order to serve the full scope of needs surrounding REITs, we work with a cross-disciplinary team that involves our real estate and financing, securities law, and tax attorneys.

Our team handles REITs and those that transact business with REITS—sponsors, investors, operators, property managers, asset and investment managers, development partners, joint venture partners, tax exempt organizations, and lenders—across the full range of asset types, including office, industrial, multifamily, hospitality, health care, and assisted living and data centers.

The members of our REIT practice team are familiar with the potential tax and non-tax benefits of the REIT structure, as well as some of the complexities and shortcomings of the REIT structure. We have assisted existing real estate companies examining whether the REIT structure and UPREIT structure are appropriate vehicles for the monetization of their existing real estate portfolios. We have also worked with owners of operating businesses and their advisors to evaluate whether the contribution of some or all of their real estate assets to a REIT-ready structure is a proper vehicle for advancing the company's overall business objective.

In addition to assisting client’s contemplating the REIT structure, our REIT practice includes:

  • 1934 Act filings
  • Environmental
  • 1940 Act status
  • Lending
  • Real estate acquisitions and financing
  • Leasing
  • Joint venture formation
  • Bankruptcy, workouts and restructuring
  • Use of the UPREIT structure to acquire properties using OP Units

Real Estate, Finance and Transaction Structuring

Quarles & Brady has represented a number of REITS in connection with complex lending transactions, acquisitions, dispositions, leasing, and development projects throughout the United States. Our work ranges from single-site acquisition, disposition, development, and financing transactions of varying levels of complexity to highly structured multi-site, multi-state portfolio acquisitions, dispositions, and financings. Members of our bankruptcy, workout, and restructuring practice are an integral part of our team, and are available to work with our clients when it becomes necessary to restructure or modify the terms of financial transactions.

Members of the Quarles & Brady tax practice, working in conjunction with other members of our REIT practice team, have significant experience in structuring complex like-kind exchanges, including forward and reverse 1031 exchanges involving multiple properties and the use of tenant-in-common (TIC) and Delaware Statutory Trusts (DST) and post-exchange refinancing techniques. In addition, members of our REIT practice team have significant experience in structuring acquisitions of properties by REITs and the contribution of properties to REITs or umbrella partnership REITs (UPREITs) in exchange for operating partnership (OP) units, as well as negotiating and structuring joint ventures involving REIT and non-REIT members.

Leasing

Quarles & Brady regularly represents landlords in the leasing of all types of commercial properties throughout the country. We regularly prepare, review, and negotiate all types of sophisticated leases for office, industrial, warehouse, flex-space, retail, restaurant, and other uses, as well as rooftop antenna agreements, telecommunications license agreements, temporary space agreements, parking agreements, indemnity agreements, sublease and assignment documents, sublease and assignment consent documents, and construction agreements.

Our REIT practice team has experience assisting REITs in structuring leasing transactions such that the REIT complies with the "REIT Rules" promulgated by the IRS and does not earn income from "impermissible tenant services." We have extensive experience negotiating master leases and ground leases, each of which can be drafted and negotiated in ways to allow REIT landlords to receive "good" income under the "REIT Rules."

Joint Ventures

At Quarles & Brady, we have a long history of representing tax-exempt institutional investors in a wide variety of private REIT transactions. We also have significant experience in representing clients considering the use of publicly registered non-traded REITs as part of an organizational structure designed to attract investment and minimize taxes for tax-exempt investors and foreign investors. In addition, we represent owners and operators of real estate in connection with the use of limited liability company structures to transition into the formation of private REITs.

Securities

Quarles & Brady has in-depth knowledge of corporate law and complex securities laws and regulations. We provide legal counsel to issuers, underwriters, buyers, and sellers of securities in the full range of securities offerings, corporate financing transactions, business combinations, and other transactions. These include public offerings of equity, debt, and hybrid securities in IPOs, subsequent offerings, and offerings under shelf registration statements; mutual fund transactions and activities, including regulatory approvals, Blue Sky compliance, and fund operation; SEC reporting and advice regarding disclosure obligations in formal and informal disclosure; and representation of brokers/dealers and investment advisors, including organization, licensing, regulatory compliance, and administration. Our clients include Fortune 500 companies, public companies in varying sectors and industries, venture capitalists, private equity funds, finance companies, mutual funds, and brokers/dealers.

Environmental Services

Quarles & Brady has an extensive environmental practice group consisting of approximately 25 attorneys practicing nationwide and advising on all federal and state environmental matters. The environmental team frequently works "hand-in-glove" with the REIT practice team and advises clients on an extensive range of environmental matters, including environmental issues encountered in real estate development projects (e.g., Walmart site selections and developments), asset dispositions (e.g., sales of assets with known presence of soil contamination, asbestos, or mold), fuel consortiums, complex regulatory matters, litigation, environmental insurance, and other transactional matters.