Real Estate Archives - Adishian Law

EL SEGUNDO, CA (May 11, 2018)—Adishian Law Group Advises Malaga Bank on Real Estate Purchase.

Adishian Law Group in El Segundo, California is pleased to announce that Malaga Bank, a wholly owned subsidiary of Malaga Financial Corporation, (OTC: MLGF) acquired its headquarter’s office building. Malaga Bank is a full service community bank headquartered on the Palos Verdes Peninsula. It has branch offices on the Peninsula, Torrance and San Pedro. Since 1985, Malaga Bank has been delivering competitive bank services to residents, businesses and community organizations of the South Bay. The building, commonly known as 1 Malaga Cove Plaza, is part of the iconic Malaga Cove Plaza.

“Every transaction has a story” said Adishian Law Group President, Chris Adishian. “As we learned in the course of the transaction, the vision for Malaga Cove Plaza’s creation dates back to the very formation of Palos Verdes Estates, when the tract map was recorded by…..Bank of America, in late 1923! That’s right Bank of America owned much of the land in this area of Palos Verdes Estates. For perspective, in late 1923, WWI had been over by nearly 5 years, and the Great Depression was about 6 years away. In between, the template was set for this section of Palos Verdes Estates.”

On behalf of our client, Adishian Law Group led the legal work on the transaction from initial exercise of Malaga Bank’s option through Closing. Our services included negotiating, draft or reviewing the following documents: Operative lease with all amendments; Notice of Exercise of Right to Purchase; Purchase and Sale Agreement, along with associated Addendums, Reviewing Title reports, Tract Maps, Chain of Title Documents, Easement Grants and Purchaser’s Closing Instructions.

About Adishian Law Group, P.C.

Adishian Law Group is a California law firm with a statewide practice in the areas of Corporate law, Employment law and Real Estate law. Adishianlaw.com is one of the oldest continually operating law firm websites on the Internet. The firm serves its clientele via three offices located in the major business hubs of El Segundo, Palo Alto and San Francisco.

For more information about this transaction, contact Chris Adishian:

EL SEGUNDO, CA (December 31, 2017)—Adishian Law Group Advises Pioneer Magnetics on Sale of Business.

Adishian Law Group is pleased to announce the sale of Pioneer Magnetics’ power supply business to United States Technologies-Aldetec Holdings Company (“UST-Aldetec”).

“This transaction was an opportunity to represent a truly remarkable sixty year old, Santa Monica-based family business that designs, manufactures and sells mission-critical power supply products to a global customer base” says Attorney Chris Adishian.

On behalf of our client, Adishian Law Group led the legal work on the transaction from initial letter of intent (LOI) through Closing. “Like many family business sales, this transaction involved many stakeholders, and we coordinated our representation with other attorney retained to advise the shareholder’s family on matters relating to the sale” stated Adishian.

The firm’s work included included negotiating, draft or reviewing the following documents: Letter of Intent, Deal Memo, Asset Purchase Agreement, Schedules, Escrow Agreement, Bill of Sale, IP Assignment and Assumption Agreement, Transition Services Agreement and a variety of post-Closing matters.

About Pioneer Magnetics

Founded in 1957 by Dr. Allen B. Rosenstein, over the course of 60 years Pioneer Magnetics built a global business designing and manufacturing the highest quality switching power supplies. PMI’s power supply business offers low voltage and high current products ranging from < 1,000 Watts to > 30KW per box. COTS, isolated and non-isolated, intelligence as well as “thousands” of combinations, such as racks/power shelves, are available in standard and unique sizes.

About UST-Aldetec

UST-Aldetec is a consolidation of companies brought together to provide superior services and products to our Defense and Commercial customers. Together they are expert at RF detection, Frequency Conversion, Broadband Amplification, Power management, and repair/re-engineering of subsystems for obsolescence mitigation and extending system lifetime. UST-Aldetec teams can design, manufacture and support products seamlessly and rapidly. Their design turn averages less than 6 months from receiving a specification. Our goal is to provide high quality subsystems to our customers at an affordable price, and to keep them running with an exceptional MTBF. UST-Aldetec is a certified small business, AS-9100 certified with over 40,000 Square feet of manufacturing space.

About Adishian Law Group, P.C.

Adishian Law Group is a California law firm with a statewide M&A practice led by Chris Adishian. To see other transactions, please view our Case Studies and review other M&A Press Releases.

For more information about this transaction, contact Chris Adishian:

EL SEGUNDO, CA (September 30, 2017)—Adishian Law Group Advises Welcome Group on New Real Estate Construction and Sale to Moose Toys

Adishian Law Group in El Segundo, CA announces the Closing of a 22,607 gross square real estate construction and sale transaction between our client and Moose Toys. Our client (“Seller”) built and delivered 2 free-standing shell office buildings with each building comprised of 2 condominium units. In addition, Seller built and delivered a companion parking structure totaling approximately 345 parking spaces, some of which are licensed to Moose Toys. This project is located within Campus El Segundo development. El Segundo remains a very attractive real estate destination for companies or investors around the world.

On behalf of our client, our firm led the legal work on the transaction from PSA through Closing. Our work included negotiating, drafting or reviewing the following documents: Purchase and Sale Agreement; Temporary Access Agreement; Contracts for Construction; Assignment of Purchase Agreement; Short Form Deed of Trust; Escrow Instructions and Amendments; Parking License Agreement; Reciprocal Access Agreement; Notice of Completion; Owner’s Affidavit; Grant Deeds; HOA deeds and 1031 Exchange related documents.

About Adishian Law Group, P.C.

For more information about this transaction, contact Chris Adishian:

This article focuses on attorney’s fees clauses in real estate leases. The principles here could apply to any written contract. Often times, the negotiation of attorney’s fees and the implications of having these clause become the “Game Within The Game:”

In California, unless attorney’s fees are provided for by statute or contract, each party will absorb his/her/its litigation fees. This becomes a consideration in whether or not to pursue litigation, or settling a claim. To use a simple example, if it will cost a Plaintiff $50,000 of attorneys fees (plus time, etc. etc.) to recover $50,000, such that Plaintiff’s net recovery is zero, is it worth it? Probably not.

Attorney’s fees provision change this calculation by granting the winner his/her/its attorney’s fees on top of the recovery. For example, if it will cost you $50,000 of attorneys’ fees to recover $50,000, but there is a statutory or contractual provision for attorneys’ fees to the prevailing party, then suddenly the Plaintiff’s net recovery is $50,000. On the other side, the Defendant’s exposure is much higher, as Defendant is now possibly paying 2x the original amount at issue.

As a Landlord when you are drafting your leases, look carefully at the attorney’s fee provision. Residential landlords generally have more assets and more bargaining power than tenants. Commercial landlords, aside from situations involving large national tenants (i.e. Home Depot, Walgreens, etc.), also generally have more assets and more bargaining power than their tenants. Given this relative relationship, Landlord’s often mistakenly believe that having an attorney’s fee provision in a lease will be a deterrent to litigation. Often times it is just the opposite.

Attorneys representing Plaintiff tenants (particularly residential tenants) typically work on a contingency basis, with the backing of an attorney’s fee provision in the event that they prevail. This is generally the first inquiry that a contingency attorney will take in evaluating a plaintiff’s case.

Landlords often don’t consider these provisions, or if they do, they mistakenly believe that the tenant will fear the prospect of paying Landlord’s attorney’s\ fees and it will be an effective deterrent. In the majority of cases, where there is a significant disparity between the Landlord and Tenant in terms of assets, resources and bargaining power, it is not a deterrent. If you are Landlord with an open ended attorney’s fee provision in your leases, you are inviting Plaintiffs’ attorneys to take a “free shot” with a Plaintiff who may have a marginal case and “nothing to lose” financially.

Better practice in these situations is to include provisions that either (1) cause each party to bear the its own attorney’s fees and costs or (2) limit attorney’s fees to some reasonable amount of money. Where the parties are more evenly matched in terms of assets and bargaining power, then this provision may serve as more of a deterrent to baseless or highly speculative litigation.

About Adishian Law Group, P.C.

Adishian Law Group is a California law firm with a statewide practice in the areas of Corporate law, Employment law, Real Estate law and Mediation Services. Adishianlaw.com is one of the oldest continually operating law firm websites on the Internet. The firm serves its clientele via three offices located in the major business hubs of El Segundo, Palo Alto and San Francisco. As of March 2013, Adishian Law Group, P.C. has represented individual and corporate clients located across 20 California counties, 4 States outside of California and 9 foreign countries — in over 340 legal matters.

For more information about this topic or to speak with Chris Adishian:

Attorney’s Fees do NOT Count Towards the Jurisdictional Limit in Limited Jurisdiction Cases In California.

This article discusses attorney’s fees in one of the rare cases where we would, and have, represented a Plaintiff in a limited jurisdiction case.

As every lawyer knows, and most non-lawyers, the California Superior State Court system is divided largely into three level based on the “amount in controversy.” Amounts in controversy totaling $10,000 are directed to Small Claims Court, where the parties represent themselves without attorneys. Amounts in controversy greater than $25,000 are directed to the Superior Courts of “Unlimited Jurisdiction.” Amounts in controversy GREATER than $10,000 but less than $25,000 are directed to Superior Courts of “Limited Jurisdiction.”

In Unlimited Jurisdiction, there is no cap on jurisdiction, so there is no theoretical cap on attorney’s fees submitted or awarded provided there is a legal basis for the attorney’s fees, which are adequately supported and approved by the Court. That would seem obvious.

Less obvious though, is what happens to attorney’s fees in limited jurisdiction. For example: Plaintiff has a $10,000 breach of contract claim, and the contract has an attorneys’ fee provision. Defendant may believe that his worst outcome in this case is a $25,000 judgment against him plus his own attorneys’ fees (i.e. $10,000 plus $15,000 in plaintiff’s attorney’s fees, thereby totaling the jurisdictional limit of $25,000). Defendant would be wrong, and it could be an expensive lesson.

California’s Code of Civil Procedure Section 85(a) provides that: “The amount in controversy does not exceed twenty-five thousand dollars ($25,000). As used in this section, “amount in controversy” means the the amount of the demand, or the recovery sought, or the value of the property, or the amount of the lien, that is in controversy in the action, exclusive of attorneys’ fees, interest, and costs.

We’ve seen this arise in the context of commercial security deposits, where commercial leases almost always have attorney’s fee provisions.

The lesson of course is to not only do the right thing, but also in assessing your cost-benefit of litigation, understand that on “either side” a $10,000 dispute in limited jurisdiction court, could result in a liability 5-20x the amount in controversy to the losing party if litigated through trial and attorneys fees are awarded.

About Adishian Law Group, P.C.

For more information about this topic or to speak with Chris Adishian:

EL SEGUNDO, CA (March 7, 2013)—Adishian Law Group Plays A Key Role In Reshaping El Segundo as Part of Largest Vertical Land Development Project West of Sepulveda Blvd (PCH) in the South Bay of Los Angeles during 2012-2013

Adishian Law Group in El Segundo, CA announces the closing of a real property transaction that will be among the most beneficial to the City of El Segundo in recent history. It is believed that this project is the largest vertical land development west of Sepulveda/PCH in the entire South Bay of Los Angeles during the last two years. The leaders of the project, known as the “222 Kansas Street Specific Plan,” are SMPO Lab, LLC (www.smpo.com) of Memphis, Tennessee and local developer Mar Ventures, Inc. (www.marventures.com) of Torrance, California. The approximately 4.7 acre parcel in El Segundo had fallen into disuse after International Rectifier (NYSE:IRF) shuttered its computer chip manufacturing facility that had occupied most of the property for many years.

Prior to SMPO acquiring the property, another developer had attempted to develop the site, but was unable to complete its plans. Once SMPO acquired the entire parcel, it entered in a contract to sell approximately 1.6 acres to Mar Ventures. SMPO had plans to build new industrial and laboratory space to house the USDA’s Animal and Plant Health Inspection Service unit that serves Los Angeles International Airport and the Port of Long Beach. Mar Ventures’ plan was to build a 20-unit modern, brick and glass office condo complex fronting Kansas and Grand (www.grandkansas.com). There was only one small detail—Adishian Law Group’s clients owned an existing parcel that was positioned in such a manner as to require their cooperation for the project to go forward as envisioned. Adishian Law Group represented its clients in negotiations with Mar Ventures.

Adishian’s directive was to reach a fair-minded resolution that would protect its clients’ interests, allow the project to go forward, and result in a win for everyone. Had Mar Ventures and SMPO not arrived at a mutually beneficial agreement with Adishian’s clients, the project may not have gone forward all, and certainly would have been delayed and reconfigured.

“All parties wanted the transaction to go forward,” says Adishian Law Group President, Chris Adishian. “Although simple in concept, this deal ultimately required a carefully orchestrated series of transactions that subdivided the original parcel, and then allowed the Mar Ventures’ parcel to be further subdivided into new lots in order to fulfill its ultimate intended use of the land. These transactions included a Lot Line Adjustment, a Letter of Intent, a custom Multi-Party Agreement, a Declaration and Grant of Restrictive Covenants, Conditions and Restrictions, as well as Easements, Grant Deeds, a Conveyance Agreement and an Option Agreement.” Adishian continues, “Like many long range projects of such scale and complexity, this project was a long time in coming. It required the sustained efforts of SMPO, Mar Ventures, the City of El Segundo, Southern California Edison, architects, engineers and some diligent lawyering to steer this project to a successful completion. The SMPO and Mar Ventures teams were first rate, and our friends at Obelisk architects and Denn Engineering also made very valuable contributions.”

The City of El Segundo will benefit in several significant ways. The project transforms land within the city limits that was lying fallow into productive use. The tax base of the city has now improved, and the Grand Avenue corridor has become more aesthetically pleasing. Of course, more employees working within the project will help local El Segundo businesses. Such success in the real estate arena requires a law firm with experience, creativity, credibility and the ability to work cooperatively with a diverse range of parties and interests in order to accomplish the end goal. This successful transaction illustrates why the Adishian Law Group deserves its reputation as a fair-minded, knowledgeable and effective closer of even the most complex real estate transactions.

About Adishian Law Group, P.C.

For more information about this topic or to speak with Chris Adishian:

California is home to over 35,000,000 people. With all those real estate transactions happening in the State, it has become common for an allegation of a “failure to disclose” to arise after escrow has closed on a residential sale (e.g. condo or single family residence). This article does not address any failures to disclose in commercial transactions.

What should you do if you believe a Seller has “failed to disclose” a material item?

California courts have answered this question by empowering a the Buyer with a common sense choice, called an “election of remedies” — the Buyer can (1) file a Complaint for Rescission or (2) Affirm the Contract and Sue for Damages. In English, Option 1 means that a Buyer can ask a Court to order the Seller to take the property back and repay the Buyer (with certain credits and offsets for the time period the property was owned by the Buyer), such that both parties are returned to their prior positions before the sale. Option 2, means that a Buyer can simply elect to keep the property and sue the Seller for damages (i.e. money). (The calculation of damages will be the subject of another post).

Liability v. Damages

The law makes a fundamental distinction between liability and damages. Liability means that a party is legally responsible for the “damages” caused by his wrongful act (i.e. he/she broke the law). Damages is a legal attempt to quantify the harm so that a Court can order the party liable to pay money.

In some failure to disclose cases, there may be liability but no damages, and in such cases the Courts want the parties to move on with their lives, even where one party clearly failed to disclose something that they should have disclosed. In such cases, the rule boils down to “no harm, no foul” (or “he / she lied, but so what”).

In other failure to disclose cases, there can often be SUBSTANTIAL AMOUNTS of money at stake, climbing into the HUNDREDS OF THOUSANDS or even MILLIONS!

About Adishian Law Group, P.C.

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We continuously receive inquiries from both Landlords and Tenants regarding termination of tenancies. This article applies to the renewal and termination of residential real property in California cities and municipalities that do NOT have local rent control ordinances (e.g. Santa Monica, Berkeley, San Francisco). However, even in these non-rent control jurisdicition, landlords must be careful with lease terminations.

Where there is a rental of a residential property for a term not specified by the parties, the general rule in California is 60 days notice. However, only 30 days notice is required in the following circumstances:

(A) If any tenant or resident has resided in the dwelling for less than one year, or
(B) If ALL of the following apply:

The dwelling or unit is alienable separate from the title to any other dwelling unit.
The owner has contracted to sell the dwelling or unit to a bona fide purchaser for value, and has established an escrow with a licensed escrow agent, as defined in Sections 17004 and 17200 of the Financial Code, or a licensed real estate broker, as defined in Section 10131 of the Business and Professions Code.
The purchaser is a natural person or persons.
The notice is given no more than 120 days after the escrow has been established.
Notice was not previously given to the tenant pursuant to this section.
The purchaser in good faith intends to reside in the property for at least one full year after the termination of the tenancy. Cal. Civ. Code § 1946.1 (West)

Any notices served under this Section, must meet the notice requirements of Section 1162 of the California Code of Civil Procedure.

About Adishian Law Group, P.C.

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What is a §1031 Exchange?

Section 1031 provides for “Nonrecognition of gain or loss from exchanges solely in kind: (1) In general. No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held either for productive use in a trade or business or for investment.” In short, this means that if you want to sell an investment property now worth $3,000,000, that you originally purchased for $1,000,000, Section 1031 will allow you to rollover the entire $3,000,000 (including the roughly $2,000,000 in gain calculated as $3,000,000 minus $1,000,000, leaving depreciation out for the sake of simplicity) tax free!

Some Rules

In order to qualify for tax free treatment under Section 1031, the Seller must (1) use a Qualified Intermediary; (2) Identify the replacement property within 45 days; (3) The replacement property must be “like-kind” and (4) The replacement property transaction must close within 180 days of the closing of the relinquised property. As may be obvious, this area of real estate law is “jargon-heavy.”

About Adishian Law Group, P.C.

For more information about this topic or to speak with Chris Adishian:

Telephone: 310.726.0888 | 650.955.0888 | 415.955.0888

Email: askalg@adishianlaw.com

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In the current recession, commercial landlord’s are just beginning to feel the pressure from tenants seeking rent concession or the outright elimination of their rent obligation. See Wall Street Journal, “Struggling Retailers Press Struggling Landlords on Rent”, January 2009. There is also a rapidly shrinking pool of high-quality “anchor” as major retail chains file bankruptcy seemingly one after the other. As a commercial property owner, what should you do to protect your interest?

Surrender or Termination or Both.

A lessee cannot effect a surrender and termination of a lease unilaterally. The landlord must accept the offer of termination for it to be in effect. Under California law, an abandonment of the premises by the tenant is merely an offer to surrender their lease. See Miller & Starr, 3rd. Ed., Vol 7, Sec. 19.

Upon receiving an offer of termination from a tenant, a commercial landlord must make an election of his remedy: (1) Ignore the offer to terminate, treat the lease as continuing and sue to recover rent as it becomes due provided that the lease permits the lessee to sublease or assign its interest; or (2) Accept the offer to terminate, and pursue remedies under CCC §1951.2.

How well companies and individuals managing real estate assets through an economic downturn is critical to long term success in real estate.

About Adishian Law Group, P.C.

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via three offices located in the major business hubs of El Segundo, Palo Alto and San Francisco. As of March 2013, Adishian Law Group, P.C. has represented individual and corporate clients located across 20 California counties, 4 States outside of California and 9 foreign countries — in over 340 legal matters.

For more information about this topic or to speak with Chris Adishian: