Kleinberg Kaplan provides comprehensive legal services to sponsors of private equity funds and hedge funds that focus their investments on real estate and real estate-related assets. The experience of our real estate group, combined with our significant knowledge concerning investment funds, gives us the ability to advise our clients on all aspects of their structures, operations and investment transactions.
The real estate funds we form often have unique mandates. Some are permitted to invest only in certain geographic regions (whether in the U.S. or outside the U.S.). In other cases, funds have asset class restrictions, such as permitting investments only in residential real property, development of medical office buildings, making of first and second mortgage loans and/or mezzanine loans and owning and improving vineyards in certain regions. In each case we help explore the flexibility the manager needs to allow for diversification and changes in market conditions, while anticipating the targeted needs and expectations of the fund’s investors.
We prepare private placement memoranda, subscription agreements and partnership/operating agreements, and work extensively on structuring our clients’ management company arrangements and compensation plans. In some cases, larger investors require special deals, whether they relate to economics, oversight or key-man concepts. We work with our clients to analyze investor requests and draft and negotiate side letters to memorialize the agreements reached. We also provide our clients with day-to-day practical guidance on fund terms, subscription lines of credit, governance issues, securities law compliance, blue sky filings and ERISA.
We have substantial experience in representing funds in the purchase and sale of a wide array of real estate-related assets including distressed residential properties, medical office buildings, commercial office buildings, distressed and performing mortgage and mezzanine loans as well as real estate structured products and derivatives. We have also represented funds in the issuance of mortgage and mezzanine debt instruments.
We help structure debt and equity investments for our real estate fund clients, including first and second mortgages, mezzanine loans, preferred equity and hybrid structures, and deal quite frequently with joint venture structures representing either the financing partner or the operating partner. We also guide our clients through the implementation of a successful exit strategy for their investment positions, including tax structuring.
Regulatory & Compliance
We help our clients assess and comply with their obligations to register as investment advisers, commodity pool operators and commodity trading advisers, including preparing SEC, CFTC, NFA and state-required registration materials and filings as well as claiming exemptions from registration where possible.
Throughout the formation and life of each fund, our tax lawyers work closely with our clients to maximize the fund’s tax efficiency. In planning the fund’s tax structure we consider issues such as the location, nature and exit strategy for the investment portfolio and/or specific investments, issues affecting specific types of investors (such as U.S. tax-exempt and non-U.S. investors) as well as other factors. We have experience with a wide range of tax structures, such as blocker corporations and private REITs, to address or minimize the tax and fiduciary efforts on certain classes of investments.
As with any new investment, we routinely discuss with our clients the tax, estate planning and creditor protection opportunities available to them when structuring their interests in the fund. Our trusts and estates attorneys are very experienced in helping fund managers assess their planning options and implement their choices.