Haas & Najarian's hospitality-real estate attorneys have significant experience in the acquisition, disposition, management, financing, and construction of hospitality properties. They participate in a number of industry associations (AH&LA, CH&LA, AAHOA and the Academy of Hospitality Industry Attorneys), understand the hospitality industry and maintain business relationships with a number of industry players (including many of the brands, third-party hotel management companies, marketing and feasibility consultants, and brokers), giving them the ability to provide their clients with valuable resources and real time market information. This combination also allows them to identify and focus on the specific issues important to our clients while not losing sight of the big picture.
The firm's hospitality services include:
Acquisitions and dispositions
Since the acquisition and disposition of hotels is uniquely different from other real estate because hotels are a hybrid asset (consisting of traditional real estate and an ongoing business), Haas&Najarian draws on the collective experience of its real estate, tax, business, employment and litigation attorneys to serve its clients.
The firm has considerable expertise in:
· Preparing letters of intent, confidentiality and access agreements;
· Reviewing listing/commission agreements;
· Structuring and forming acquiring entities, including joint venture relationships between hotel managers and equity partners;
· Assembling teams consisting of appropriate professionals to advise clients on the selection of the right "flag" and hotel manager;
· Preparing and negotiating purchase and sale agreements;
· Performing legal due diligence;
· Serving as local counsel to out-of-state law firms;
· Reviewing and negotiating loan documents and preparing legal opinion letters; and
· Shepherding transactions through closing.
The firm's attorneys represent owners and managers in the negotiation and documentation of branded and third-party hotel management agreements. Since the wrong manager or bad management agreement can have a significant negative impact on the value of a hotel, the right manager and a fair management agreement are essential for increasing the likelihood of success.
We advise clients on:
· The pro's and con's of branded v. third party hotel management agreements;
· How to align the interests of branded hotel managers with the owner's interests;
· The length of the term and the need for certain termination rights, including terminations based on sale of the hotel, failure of the manager to satisfy performance standards, cause and convenience;
· Structuring payment of base and incentive fees and subordinating payment to a return on investment to the owner;
· Subordination and non-disturbance agreements;
· How to retain control over important matters, such as operating and capital improvement budgets and selection of executive staff members;
· How best to hold liquor licenses;
· Exit strategies in case the hotel goes back to the lender;
· How to minimize the owner's exposure for not funding operating shortfalls; and
· Restructuring management agreements for distressed hotels.
Financings, Loan Workouts and Receiverships
We regularly represent borrowers in the review and negotiation of loan documents for permanent and construction loans. Drawing on our knowledge of the industry, we have handled numerous hotel loan workouts and receiverships.
From ground up construction to PIP renovation, our attorneys provide clients with the legal framework to get their projects completed on time and within budget. Our construction attorneys have years of experience in representing developers, contractors and sureties and are intimately familiar with the AIA construction agreements and general conditions. Combining their experience with the knowledge of our real estate hospitality attorneys provides our clients with a team of attorneys who understand construction issues specific to hotels. We regularly counsel clients on:
· Selection of architects and contractors;
· Use of construction managers;
· Review and negotiation of construction loan documents;
· Use of design/bid v. design/build and firm fixed price contracts v. cost plus with guaranteed maximum price contracts;
· Review and negotiation of design and construction contracts;
· Working with franchisors develop realistic milestones and submittal procedures, including use of the "model/display" rooms;
· Limiting exposure for delay damages, especially for renovation work performed in an operating hotel; and
· Allocation of risks and liabilities through use of insurance products.
Representative Hotel Transactions
· Represented the buyer in the acquisition, repositioning and later disposition of the Ilikai Renaissance Hotel in Honolulu, Hawaii in excess of $200,000,000.00.
· Represented the buyer of the Westin Bonaventure Hotel in Los Angeles.
· Represented a developer in the purchase of an office building located at 45 E. 33rd Street (between Park and Madison) in New York, N.Y., demolition of the existing office building and ground -up development of a new Hilton Garden Inn. This engagement involved the negotiation and drafting of a purchase and sale agreement, the negotiation and review of a land acquisition loan, construction loan and semi-permanent loan, the negotiation and drafting of design and construction contracts, the negotiation of a franchise agreement and the preparation and negotiation of a third-party hotel management agreement.
· Represented The Carlyle Group in the purchase of a portfolio of four hotels in Northern California. This engagement involved the negotiation of a purchase and sale agreement, loan documents, franchise agreements and management contracts.
· Represented Sand Hill Property Group in the negotiation of a Residence Inn by Marriott franchise agreement for a new development in Cupertino, CA.
· Represented the seller of the Holiday Inn Express at Fisherman's Wharf to a joint venture consisting of Summit Hospitality and InterContinental Hotel Group.
· Represented Fullwel International Group in the negotiation of a Townplace Suites by Marriott franchise agreement for a new development in Foster City, CA.
· Represented Holiday Garden U.S. in the purchase of a Residence Inn in Sacramento, CA from LNR and in the negotiation of a franchise agreement with Marriott.
· Represented HEI Hotels and Resorts in the negotiation and documentation of design and construction contracts for the renovation of the Sheraton Dallas North hotel located in Dallas, Texas and the Marriott hotel located in La Jolla, CA.
· Represented Rim Hotel Group in the sale of a portfolio of hotels to a joint venture consisting of DLJ Real Estate Capital Partners Funds (an affiliate of Credit Suisse First Boston) and Windsor Capital Group, Inc. at a purchase price in excess of $120,000,000.00. The portfolio consisted of seven hotels (two of which were on ground leases) located throughout California. This transaction involved the defeasance of a conduit loan made by Nomura Capital and serviced by GMAC.
· Represented the buyer in the purchase of a promissory note from Bank of American and the simultaneous acquisition by deed in lieu of foreclosure of a building leased as a dormitory to the University of California at Santa Cruz. This engagement included the repurposing of the building as a boutique hotel and negotiation of a construction and semi-permanent loan from Bank of America.
· Represented an out-of-state developer in the ground up development of a 106 room boutique hotel in downtown Napa known as the River Terrace Inn. This representation involved the negotiation and drafting of the management agreement with Driftwood Hospitality, the review and negotiation of a construction loan with an out of state lender, the negotiation and drafting of the construction contract with the developer's general contractor and the negotiation and drafting of a restaurant lease for an upscale restaurant located adjacent to the hotel.
· Represented Lighthouse Lodging Group in the formation of a joint venture with an equity party for the acquisition of the Marriott Hotel in Napa, CA, from Sunstone Hotels. This engagement involved the negotiation of a joint venture agreement, the negotiation of a franchise agreement with Marriott International and a hotel management agreement between the joint venture and Lighthouse Lodging Group.
· Represented The Rim Corporation, Inc., as managing partner, in connection with its joint venture with Angelo Gordon, as the money partner, in the acquisition of the Holiday Inn Hotel in Emeryville, CA from John Q. Hammons Hotels.
· Represented a court appointed rents and profits receiver in the sale of the Marriott hotel in Ontario, CA.
· Served as local counsel for Abacus Lodging Investors in the purchase of the Tuscan Inn at Fisherman’s Wharf.
· Represented a developer in the ground up development of a Staybridge hotel outside of Denver, CO.
· Represented a developer in the construction of a new Sheraton prototype in Northbrook, IL. This transaction involved the structuring and formation of the acquiring entity and the negotiation of a ground sublease, franchise agreement, management agreement and loan documents.
· Represented a buyer in the purchase and repositioning of the Radisson hotel in Sunnyvale, CA in a joint venture with Joie de Vivre Hospitality.
· Represented a developer in the purchase of the Shattuck Hotel in Berkeley. This engagement involved the removal of permanent residents, the eviction of a restaurant tenant, reinstatement of the restaurant’s liquor license and the negotiation of a hold-back agreement with the seller to address a number of seller’s pre and post-closing liabilities.
· Represented an affiliate of Sand Hill Property Group in the sale of the Hilton Garden in Cupertino, CA. This engagement involved the preparation of a purchase and sale agreement, restructuring the entity holding the liquor license and transferring the liquor license to the restructured entity, defeasance of the seller’s loan and preparation and negotiation of a management agreement under which an affiliate of seller stayed on to manage the hotel for the buyer.
· Represented a party in the purchase of the Doubletree Hotel at the San Francisco International Airport. This engagement involved the negotiation of a purchase and sale agreement, the performance of all legal due diligence, the negotiation of a management agreement with Hilton Hotels and the negotiation of a shared parking agreement with the City of Burlingame which later enabled the owner to build a 100 guest room expansion of the hotel.
· Represented the buyer of the Holiday Inn Harbor Gateway Hotel in Torrance, California from a Japanese lender.
· Represented the seller of the AmeriSuites Hotel located in the Ontario Mills Shopping Center in Ontario, California.
· Represented the seller of the Estrella Inn & Villas in Palm Springs. This engagement involved the preparation of the purchase and sale agreement and loan documents for seller carry-back financing.
· Represented the Port of Oakland in connection with the modification of a hotel ground lease for the Waterfront Plaza hotel.