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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

  • work Practice Area

    Real Property - Finance

Date & Time
  • event Date

    Thursday, December 10, 2020

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00
CLE
ALL

This CLE course will guide counsel on how to conduct real estate due diligence in an M&A transaction. The panel will discuss how due diligence in M&A can vary from standard real estate deals, and how the type of transaction--asset purchase, stock purchase, or merger--can affect the process. The panel will also discuss the use of reps and warranties to cover real estate matters which cannot be examined or resolved before closing.

Faculty

Joseph Lanzkron
Partner
Cleary Gottlieb Steen & Hamilton LLP

Mr. Lanzkron’s practice focuses on real estate, corporate, and financial transactions. He regularly advises high-profile clients on complex real estate acquisitions, dispositions, and joint ventures. Mr. Lanzkron also represents both borrowers and lenders in various mortgage and mezzanine financing transactions across multiple property types, including both securitized and balance sheet loans.

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Brian D. Meacham
Partner
Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan LLP

Mr. Meacham has experience representing public and private companies in mergers and acquisitions and commercial transactions, counseling clients with regard to general commercial and corporate law issues, and representing clients in connection with leasing, buying and selling commercial real estate. He is a frequent presenter on real estate issues related to mergers and acquisitions, among other topics.

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Description

Most mergers or acquisitions will involve real estate assets. Where real estate represents a significant aspect of the target's business, the due diligence for the M&A transaction should mirror that conducted under a real estate sales contract or a loan commitment. Otherwise, the due diligence requirements will likely be more limited. Counsel must have a thorough understanding of the role that real estate plays in the transaction.

The real estate due diligence process will also vary depending upon the structure of the M&A transaction. In an asset purchase, the purchaser is only liable for those obligations of the seller designated in the acquisition agreement. In a stock purchase or a merger, the surviving company is the successor to assets and liabilities of the disappearing company.

The buyer will often defer some of its due diligence until after the parties sign a definitive agreement. Instead, the buyer may rely on representations and warranties and representations from the target regarding title, survey, environmental, property tax, insurance, and other matters. Assumption of existing leases may be of particular importance to the business; counsel must carefully review lease terms and lease transferability.

Listen as our authoritative panel discusses best practices for real estate due diligence in M&A transactions.

Outline

  1. How real estate due diligence in M&A transactions differs from real estate transactions
    1. Assessing significance of real estate assets in the deal
    2. Assessing deal structure: asset purchase, stock purchase, merger
    3. Transaction Timing
    4. Transaction Agreement
    5. Practice tips
  2. Key due diligence concerns
    1. Title and ownership of assets (often in an SPE)
    2. Survey
    3. Leases: key terms, confirming assignabilty
    4. Environmental due diligence
    5. Taxes and insurance
    6. Litigation related to the asset(s)
  3. Addressing gaps in due diligence
    1. Reps and warranties
    2. Indemnification and escrow

Benefits

The panel will review these and other issues:

  • How is real estate evaluated, and in what ways is due diligence limited, in the M&A deal process?
  • What real estate risks must be considered with a stock purchase as opposed to an asset purchase?
  • What aspects of real estate due diligence can be conducted prior to going to contract?
  • When can reps and warranties be used to address gaps in the buyer's knowledge about the target's real estate assets and liabilities?