Acquisition and Immediate Sale of Industrial Project
Transact Law, P.C. was retained by an investment company to handle the acquisition of an industrial project, including negotiating the purchase agreement, performing due diligence and securing reasonable financing terms. During escrow, the client received an offer to buy the project at a significantly higher price than the amount it was under contract to pay for the property. The firm was then retained to structure a sales agreement with the new buyer that would not violate any of the terms of the contract to purchase the project, and thereafter to coordinate the two transactions. The initial purchase was achieved, and a later sale by the client occurred resulting in significant profit for the client.

Subdivision and Sale of Land
A client requested that Mr. Michelsen prepare a purchase agreement for the sale of a piece of commercial land that was part of a larger legal parcel. The purchase agreement required the buyer to process the subdivision so that a legal parcel could be sold. Thereafter, the firm monitored the subdivision process. During escrow, the client sought to purchase a property before the closing and wanted to enjoy section 1031 exchange treatment. This resulted in processing a reverse 1031 exchange with an accommodator. After the replacement property was purchased, the land was subdivided and sold, resulting in a successful exchange for the client.

Forming Entities for Development Companies
Mr. Michelsen is routinely engaged in forming limited liability companies for development company clients that include investors as members. This involves close coordination and cooperation with the attorneys for the investors in order to successfully to complete the formation of the company to purchase a project. The firm's staff also completes closing notebooks relating to the formation of the company and the purchase of a project and sends them to the investors for their records.

Foreclosure of Loan, Creative Financing, and Resulting Sale
The firm represented a partnership in foreclosure on a building. However, this representation was particularly difficult as the client was a junior lien holder and was responsible to the senior lien holder on a wraparound promissory note, which obligation was in dispute. The problem required the Orange County Superior Court to determine the amount due the senior lien holder. Once that was determined, the client obtained hard-money financing to take over the position of the senior lien holder, and then the client foreclosed on the property. Six months later, the property was sold to pay off the hard-money lender at a substantial profit.

Ground Lease for Retail Use
Often the firm works on ground lease matters for both landlords and tenants. In one particular transaction, a request was made to negotiate a ground lease on a retail center that was under development. This project was made difficult by the fact that the landlord was actively subdividing and financing the property and selling off parcels during the negotiations; further, the development documents were not properly prepared. Mr. Michelsen was able to navigate the changing circumstances and make sure all development issues were resolved before the lease was finalized. Thereafter, the firm was engaged to prepare the construction
agreement for the building.

Purchase of Assisted-Living Facility
The acquisition of an assisted living facility and simultaneous sale/leaseback transaction with a publicly-traded REIT entailed several challenges for the firm. One was that the purchase of an assisted-living facility requires peculiar terms in order to protect the buyer, including the stipulation that the buyer must operate the facility under the seller's license until the buyer becomes licensed. In addition, there are specific notice requirements that must be followed in the sale of an assisted-living facility, not only to the State but also to the residents. Further, special arrangements had to be made concerning governmental reimbursements of services. Another challenge overcome in this transaction was successfully negotiating a lease agreement with the REIT, which are typically resistant to changing their form agreements.

Reorganization of Ownership of Project
A client owned a large commercial project in a tenancy-in-common with another party. The client and the other party sought to convert the tenancy-in-common to a limited liability company at the time of a planned refinancing. In converting ownership of a property there are many issues to consider, including tax issues, and the firm coordinated with the appointed CPA to analyze the tax issues involved, and then formed the entity to take title. Since the refinancing occurred at the same time, all aspects of the refinancing, including negotiation of the loan documents, satisfying the lender on due diligence matters, and overseeing the escrow and title process were handled by the firm.

Renewal Rent Dispute
A common real estate problem that arises in long-term leases, including ground leases, is determining renewal rent. Many of the older leases have renewal rent language that is ambiguous. This, of course, encourages disputes. In one such dispute, the firm was retained to represent the tenant on a ground lease upon renewal. The landlord demanded a higher rent than called for in the lease upon renewal, claiming that the actual agreement between the parties 20 years ago was that the rent would be based on the fair market value of the property, although the lease did not specify that. The client would not pay the increased rent so the landlord threatened an unlawful detainer action. Together with the litigation counsel, a lawsuit for declaratory relief was filed, asking the court to resolve the issue and pre-empting the unlawful detainer ploy of the landlord. Just prior to the scheduled date of trial, a compromise was worked out with the landlord whereby the client purchased the property from the landlord on favorable terms.

Lease Assignment
One of the firm's strengths is the representation of landlords and tenants concerning lease assignments. One client owned a nursing home that was leased to a well-known operator. The operator wanted to cease its operations at the facility, but Mr. Michelsen objected to the first proposed assignee of the lease, and the client followed his advice. Thereafter, a second proposed operator was interviewed and was acceptable to all. The client was advised in the negotiation of the various lease assignment documents, resolving a long-standing issue between the original lease parties. In addition, the repair of the HVAC system was completed, and the original tenant was released from liability if the assignee exercised an option to extend.