Robert Reich Speaks: Financial Ruin to Recovery

Where is the economy heading and how long will it take before “recovery” appears? As an advocate for commercial tenants, it has always been my job to study the economy and aggressively negotiate concessions for our clients in leasing transactions. The better one understands market dynamics and supply/demand economic factors, the more effectively and successfully one can argue with landlords.

I recently went to the Commonwealth Club to hear the answers from former Labor Secretary Robert Reich, now Cal Professor of Public Policy. I took copious notes and am sharing his views on how the country arrived at this financial crossroad and where we’re heading.

I’ve been advising commercial tenants for 26 years…and hope that you and your organization take our advice to heart. Please call us to discuss your questions and explore how we may work together.

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Office Lease Bailout Advice from Real Estate Lawyer Helen Sedwick, Esq.

These are extremely difficult, confusing and opportunistic times for commercial office tenants. As the economy has turned virtually every industry upside down, the office leasing markets have followed…and will continue to trend downward for the foreseeable future. Office tenants suffering from exposure to now-unaffordable office lease payments must act soon…and in a carefully planned, methodical way. Whether considering subleasing or assigning your lease; or worse, filing for bankruptcy…surround yourselves with the appropriate experts to address your situation. Following are two essential articles addressing these critical issues from sage real estate counsel, Helen Sedwick, Esq.:

Negotiating Lease Workouts on the Edge of Bankruptcy [pdf]

First the rent comes in a day late and a dollar short. Then come the frantic calls from the CFO or CEO asking to talk. Then rent payments stop altogether. Undoubtedly a wave, if not a tsunami, of tenant defaults and bankruptcies is heading our way. Since both the Federal bankruptcy code and case law have evolved since the tenant defaults of 2001–2003, I wanted to lay out a brief bankruptcy law refresher for landlords and tenants. Plus, this article will suggest strategies for negotiating a lease workout or termination without a bankruptcy filing. A negotiated settlement is often a simpler and more efficient course. Why is today different from the last downturn? Read on…

Subleasing Issues for Sublandlords and Subtenants [pdf]

The sudden collapse of prestigious firms such as Heller Ehrman and Lehman Brothers, plus the disappearance of financial giants such as Merrill Lynch, Wachovia and Washington Mutual, will flood the office market with hundreds of thousands of square feet of subleasing space. If your firm is considering entering into the subleasing market whether as a Sublandlord or as a Subtenant, then consider the following: Read on…

Join me to tour the new California Academy of Sciences’ Living Roof

cas

As you may recall, Mihalovich Partners represented the California Academy of Sciences, negotiating the lease for their 204,000 square foot temporary home at 875 Howard Street—the largest lease in San Francisco in 2003 and probably the most complex, to date. I’m now proud to continue my relationship with the Academy at their new home in Golden Gate Park as a Green Building Guide stationed on the living roof.

By now, I’m sure you’ve read all about the new building housing its four-story Rainforest, the Steinhart Aquarium, the fully digital Morrison Planetarium and the Kimball Natural History Museum all under one living roof. If you’ve yet to see it for yourself, let me be your guide.

I’ll be up on the roof on the 2nd Sunday (2:00 – 5:00 p.m.) and the 3rd Thursday (11:30 a.m. – 2:45 p.m) of each month. So drop by and let me give you a “tour” of the 2½ acre living roof. It really is a wonder of sustainable architecture and green practices.

Advice to Tenants Facing Economic “Tsunami”

In many respects, we’ve been here before. Seriously, I’ve been representing tenants in the City for 26 years—all but a few of which have been great years for tenants. With the “tsunami” effect on the global economy (articulated last week by Alan Greenspan), office tenants should find some comfort knowing that we’re entering a period of 7-10 YEARS during which tenants will have the upper hand in negotiations with landlords.

So what should you do about it? Read our latest article, Advice to Tenants: How to Survive the Big Ugly, to learn how we create strategies and negotiate for our clients’ office leases.

Then let us help your organization thrive through your next lease term.

I look forward to your feedback about our advice.

Bill Gross/PIMCO on Credit Crisis: Nothing to Fear but McFear Itself

Bill Gross, Managing Director and one of the founders of PIMCO (the world’s largest bond fund), sits at the epicenter of the world of credit. His October Editorial, which is available on our website as a PDF, offers an explanation of the credit crisis along with his recommendations—spot on and easy to understand for those who don’t work on Wall Street.

Bill Gross is under consideration to assist the U.S. Government in managing the $700 billion Troubled Asset Relief Fund (TARP) fund.

Hopefully you’ll find some clarity and comfort in Mr. Gross’ commentary.

Mihalovich Feeds CAL Bears 10% of ’08 Revenue

Helping Cal Roar

Helping Cal Roar

The State of California provides only 34% of UC Berkeley’s budget; the rest is left up to the CAL community. That is why Mihalovich Partners has committed to donate 10% of our gross commission income to CAL in 2008.

We have 25 years of experience advocating the interests of our tenant clients, protecting them in arduous negotiations with landlords and leveraging their good name and creditworthiness to create maximum economic and lease concessions from landlords. Our clients include the California Alumni Association; The California Academy of Sciences; The Bar Association of San Francisco; Wilson, Sonsini, Goodrich & Rosati and 35 other law firms.

We’d now like to put our years of experience to work for CAL!

Let’s make a date to get together to talk about the Cal Bears—and how choosing the most experienced broker can help your firm and our Alma Mater.

Go Bears!
Dan Mihalovich, ‘78 (Lair Staff ‘73–‘75, Cal Parent)