Structuring the Complex Commercial Real Estate Lease - Government Incentives, Real Estate Tax Exemptions, Condominium Conversions, Financial Reporting Considerations, Intervening Leases, Tax Considerations and Unintended Consequences


Competition for tenants of substantial commercial real estate leases will often require the successful landlord to agree to complex lease structures, or even the re-structuring of the underlying real estate. Tenants making a substantial, long-term investment in a lease of real property will be best served by a team of professionals with expertise in the various components of an optimal structure, taking into account all relevant circumstances and the potential availability of government incentives and/or "as of right" real estate tax exemptions.

State and local government programs designed to lure tenants to designated locations, or to prevent their relocation to competing cities or states with a corresponding loss of jobs, are often dependent upon some form of relief from real estate taxes and/or sales taxes relating to the construction of leasehold improvements. This relief from taxation has sometimes required a transfer of actual or deemed ownership of all or a portion of a parcel of real property or a building to a tax-exempt development agency.

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