Insight

Bet the Skyscraper Negotiation

Bet the Skyscraper Negotiation

Adam Leitman Bailey

Adam Leitman Bailey

August 10, 2021 03:07 PM

Between COVID-19 and the government’s shut down of the city of New York and its real estate, the disaster that hit New York had never been seen before. For the skyscraper that is the subject of this case study, almost 50 percent of the commercial tenants stopped paying rent or completely moved out of the building and terminated their leases. For those tenants not paying rent, many of the leases had self-help clauses that allowed Adam Leitman Bailey, P.C. to avoid the use of a court system that for most purposes had been shut down. The firm used peaceable self-help measures to regain possession. However, there were no new tenants lining up to take the spaces in either retail or office. This had been going on throughout the state of New York and Adam Leitman Bailey, P.C had come up with different ways to handle negotiating with the tenants, through pre-negotiation agreements, payment plans, sharing in profits, and many other scenarios that seemed to lessen the bleeding. However, many of these buildings either had a mortgage or were ground tenants, and the lender or the ground lessor wanted payment. For this company, this building had been built by the ground tenants about 70 years ago and was its trophy asset. It has always been the plan and the intention for the firm’s client to buy the property from the landlord and it was time to do that or at least extend the lease. Unfortunately, the client now had bigger problems, as it could not, for the first time in its history, pay its rent as a few of the larger tenants made up a majority of the rent roll, and its largest tenant announced to the press it would only be paying a small percentage of its rent during the pandemic.

Adam Leitman Bailey, P.C. was called upon to obtain a rent abatement for the building so it could survive the crisis. From reading past correspondence from the 2008 crisis when an abatement was completely rejected and all discussions refused, the firm’s clients expected the same result and had reached out to the building owners a year before and received a similar welcoming. Adam Leitman Bailey knew this time was different and that he needed to learn everything he could about the owners to understand their passions, hobbies, past experiences, and reasons for waking up in the morning to truly be able to negotiate or have the ability to create a negotiation. Since the owners were an overseas Chinese company and the world was in the middle of a pandemic, the task was made even more difficult. Adam Leitman Bailey assigned two associates to find everything they could about the targets. Nothing was too small or odd; Adam Leitman Bailey asked for weekly meetings and organized spreadsheets for each person and matter. Thankfully, the owners had been litigious so the team was able to obtain deposition transcripts that revealed so much about everyone involved in ownership. This allowed the team to find out their go-to attorney, their motivations for acting the way they did, and their approach for Adam Leitman Bailey, P.C.’s request for an abatement of rent in a way that had the possibility of working. Adam Leitman Bailey, P.C. had gathered thousands of pages of materials and put together a book of data to assist in the endeavor.

The first step had worked. Adam Leitman Bailey, P.C. had contacted the right person, an attorney, who promised to get in touch with the owners and see if she could help with the problem. She got back to the team with instructions of what she wanted and the way she wanted it with specific instructions, financials, done in a certain way including certain information for a number of years. Adam Leitman Bailey had already asked the client to collect much of this information and had their accountant working on it already so we quickly turned around the request and backed up the data for the information we provided. However, the firm did not hear back for two months, and the firm was asked for more information again. Adam Leitman Bailey calmed the client down comparing it to previous correspondence where at least now they were interested in speaking to the firm which should give the firm/client hope. Adam Leitman Bailey, P.C. supplied the additional information. Then the firm was sent to a new set of persons to work with the actual number on the abatement. Adam Leitman Bailey kept telling himself that this is one of the largest buildings in the country and therefore Adam Leitman Bailey P.C., should not be surprised by the level of detail but this had not been his first rodeo and he began to become concerned that maybe ulterior motives were in play. But each time the team dressed up the data the owner came right back asking for more detailed information. The team had numerous calls at all hours of the day, night, and weekends as they waited impatiently for responses, but now they knew an abatement was in play and it was only a matter of how much.

Adam Leitman Bailey penned a letter explaining how it benefited both ground lessor and ground tenant to do this deal. He listed the reasons the ground lessor would want a vibrant occupied building running and working, he compared the building to similar buildings in the neighborhood and presented how well this building was doing collecting rent and retainer tenants compared to others.

The letter did its job.

The abatement offer was for a number of years at a very large number. This did not happen on the first try but with a little pushing in certain directions to make sure that the client would be able to survive and do well no matter the market. The client wrote a heartfelt thank you letter to the entire team, but Adam Leitman Bailey knew that it was not for him to take credit as it was truly a team effort. Victories did not come from just surviving.

Adam Leitman Bailey negotiated the abatement and Danny Ramrattan and Marianne Sanchez computed and completed the research assignment.

Original Case Study

Adam Leitman Bailey, P.C.

Related Articles

House Trap


by Heidi E. Storz

Special districts are often being used as profit centers that leave residents to foot the bill. These homeowners deserve protection from unscrupulous developers who attempt to fleece them and avoid accountability.

Special Districts Changing Property Ownership

Announcing the 2022 Best Lawyers: Real Estate and Infrastructure Publication


by Best Lawyers

Featuring the top legal talent from The Best Lawyers in America, Best Lawyers: Ones to Watch in America and "Lawyer of the Year" recipients for real estate and infrastructure as well as thought leadership from some of the nation's top lawyers.

Real Estate and Infrastructure Publication

Choosing a Title Company: What a Seller Should Expect


by Roy D. Oppenheim

When it comes to choosing a title company, how much power exactly does a seller have?

Choosing the Title Company As Seller

Is New Always Better?


by Janice Zhou

The rapid rise of gentrification in major cities leaves residents wondering.

Road facing bridge at sunset

Gimme Shelter


by Janice Zhou

Being able to afford housing in Boston, and other desirable cities like it, is increasingly out of reach for too many. What can be done, legally and politically, to combat the problem?

Housing Shortage in Boston

Great Rebuild


by Best Lawyers

Néstor Méndez discusses labor peace, junk-bond repercussions, and the laudable resilience of those who call this storm-battered island home.

An Interview With Pietrantoni Méndez & Alvare

WATCH: Best Lawyers Discusses COVID-19 & Rental Agreements


by Best Lawyers

Three legal experts join the CEO of Best Lawyers to talk about a general approach to “the rental” market and what happens if tenants can’t pay rent in May.

COVID-19 Panel: Rental Agreements

Impact of Climate Change on Real Estate Law


by Best Lawyers

Dr. Christian Schede discusses rent in large cities, the effect of Airbnb, and more.

An Interview With Greenberg Traurig

Property Rights...and Wrongs


by Chad Cooper and Steven S. Kaufman

Winning a legal battle often boils down to finding and targeting the weakest part of an opponent’s case. Four recent real estate disputes in northeast Ohio are good examples.

Strategies for Real Estate Litigation

Trending Articles

The Real Camille: An Interview with Johnny Depp’s Lawyer Camille Vasquez


by Rebecca Blackwell

Camille Vasquez, a young lawyer at Brown Rudnick, sat down with Best Lawyers CEO Phillip Greer to talk about her distinguished career, recently being named partner and what comes next for her.

Camille Vasquez in office

Announcing the 2022 Best Lawyers® in the United States


by Best Lawyers

The results include an elite field of top lawyers listed in the 28th Edition of The Best Lawyers in America® and in the 2nd Edition of Best Lawyers: Ones to Watch in America for 2022.

2022 Best Lawyers Listings for United States

Famous Songs Unprotected by Copyright Could Mean Royalties for Some


by Michael B. Fein

A guide to navigating copyright claims on famous songs.

Can I Sing "Happy Birthday" in Public?

Why Cariola Díez Pérez-Cotapos Developed Its Own Legal Tech


by Best Lawyers

Juan Pablo Matus of Cariola Díez Pérez-Cotapos, 2019 "Law Firm of the Year" award for Corporate and M&A Law in Chile, discusses his firm's joint venture with Cognitiva in creating Lexnova, a legal AI system.

Cariola Díez Pérez-Cotapos Interview

Johnny Depp and Amber Heard: The Best Lawyers Honorees Behind the Litigation


by Gregory Sirico

Best Lawyers takes a look at the recognized legal talent representing Johnny Depp and Amber Heard in their ongoing defamation trial.

Lawyers for Johnny Depp and Amber Heard

Choosing a Title Company: What a Seller Should Expect


by Roy D. Oppenheim

When it comes to choosing a title company, how much power exactly does a seller have?

Choosing the Title Company As Seller

Best Lawyers: Ones to Watch – The Future of Legal Talent Looks Bright


by Justin Smulison

Best Lawyers: Ones to Watch is launching its second edition in the United States, and after talking with both a company leader and esteemed lawyers on the list, the importance of this prestigious list is evident.

Best Lawyers: Ones to Watch in America 2022

Announcing the 2022 "Best Law Firms" Rankings


by Best Lawyers

The 2022 “Best Law Firms” publication includes all “Law Firm of the Year” recipients, national and metro Tier 1 ranked firms and editorial from thought leaders in the legal industry.

The 2022 Best Law Firms Awards

Announcing the 2022 Best Lawyers in Canada™


by Best Lawyers

The results include an elite field of top lawyers listed in the 16th Edition of The Best Lawyers in Canada™ and 1st Edition of Best Lawyers: Ones to Watch in Canada.

Announcing the 2022 Best Lawyers in Canada™

Education by Trial: Cultivating Legal Expertise in the Courtroom


by Margo Pierce

The intricacies of complex lawsuits require extensive knowledge of the legal precedent. But they also demand a high level of skill in every discipline needed to succeed at trial, such as analyzing technical reports and deposing expert witnesses.

Cultivating Legal Expertise in the Courtroom

Announcing The Best Lawyers in France™ 2023


by Best Lawyers

The results include an elite field of top lawyers and firms from France.

Blue, white and red strips

Caffeine Overload and DUI Tests


by Daniel Taylor

While it might come as a surprise, the over-consumption of caffeine could trigger a false positive on a breathalyzer test.

Can Caffeine Cause You to Fail DUI Test?

Announcing the 2022 Best Lawyers™ in Australia


by Best Lawyers

The results include an elite field of top lawyers and firms.

Announcing the 2022 Best Lawyers™ in Australi

Wage and Overtime Laws for Truck Drivers


by Greg Mansell

For truck drivers nationwide, underpayment and overtime violations are just the beginning of a long list of problems. Below we explore the wages you are entitled to but may not be receiving.

Truck Driver Wage and Overtime Laws in the US

Announcing The Best Lawyers in Australia™ 2023


by Best Lawyers

The results include an elite field of top lawyers and firms from Australia.

The Best Lawyers in Australia™ 2023

Georgia Laws Taking Effect in 2022


by Gregory Sirico

Three new pieces of Georgia legislation aim to improve medical bill transparency, lower the sales tax on vehicles and enact further safeguards to protect children in foster care.

New Georgia Laws Enacted in 2022