Seyfarth Shaw LLP, one of America’s leading full-service law firms, announced that Peter J. Korda and Andrew M. Pearlstein have been named Co-Chairs of the Structured and Real Estate Finance Practice Group (SREF), a subgroup of the firm’s Real Estate Practice Group.

Seyfarth Shaw’s SREF attorneys represent lenders across a broad spectrum of real estate finance transactions. They structure and negotiate loans and other credit facilities, handle loan administration and servicing issues, and through the firm’s Distressed Asset Resolution Team (DART), represent the interests of clients in loan defaults, workouts, foreclosures, and borrower bankruptcies. SREF attorneys are located in the firm’s offices across the country. Operating as a national, integrated team, SREF attorneys draw upon the team members’ broad real estate finance backgrounds and practical regional knowledge to provide cutting-edge legal services.

“Seyfarth Shaw has been increasing its Real Estate Practice Group over the past several months to meet the demand from our clients in commercial real estate markets across the country,” said Mark A. Block, Chair of the Real Estate Practice Group. “Andrew and Peter are highly skilled attorneys with exceptional experience in structured loans who can lead our SREF team to focus on the finance piece of our practice in order to maximize our clients’ opportunities in the commercial real estate market, while at the same time mitigating the risks of our clients’ exposure during periods of uncertainty.”

Korda is a partner in Seyfarth Shaw’s New York office. His practice concentrates on representing members of the lending community on real estate finance matters, workouts and restructured transactions. In recent years, Korda's work has emphasized the structuring and closing of mortgage loan transactions for securitization in the capital markets, as well as conventional acquisition, permanent, interim/bridge, construction and mezzanine loan transactions. Korda has extensive experience in real estate projects across the United States, including handling multi-tier, multi-state, cross-defaulted and cross-collateralized transactions. He has closed numerous fee and leasehold financings and refinancings of major residential developments, shopping centers, office buildings, hotels and specialty projects. Korda has also worked extensively in structuring and closing syndicated transactions, equity participation loans and complex construction "take-out" transactions, as well as the financing and development of condominium and cooperative properties.

“I’m privileged and honored to help lead our firm’s talented professionals who collectively and as individuals have a vast knowledge of the structured and real estate finance products available to our clients,” said Korda.

Pearlstein is a partner in Seyfarth Shaw's Boston office, concentrating his practice in the representation of banks, financial institutions, businesses, real estate owners and developers involved in complex commercial real estate and financial transactions involving multi-family, hotel, shopping center, retail, office and industrial properties. His areas of emphasis include: representing conduit lenders in commercial real estate financings on a nationwide basis in connection with securitized loan programs; representing financial institutions (including investment banks, hedge funds, banks and insurance companies) in construction, bridge, and permanent financings, mezzanine and A/B tiered structures, leasehold financings, capital markets loans, preferred equity structures, participations and syndicated facilities, acquisition and disposition of loans (collateralized or unsecured), and other structured finance transactions; representing financial institutions, special servicers and other entities in the restructuring, work out and foreclosure of real estate loans; representing individuals, corporations and other entities in all aspects of the development or rehabilitation of real estate and condominium projects (including zoning, permitting, environmental and title matters); representing landlords and tenants in commercial lease transactions involving all types of real estate; providing counsel to condominium associations in all aspects of condominium law; and representing sellers and buyers in connection with the acquisition and disposition of all types of commercial real estate, including 1031 exchanges.

“Our clients know that they can turn to Seyfarth Shaw’s national team of top structured and real estate finance attorneys to advance their business goals in an effective and practical manner,” said Pearlstein.

SREF attorneys’ knowledge of the lending and capital markets, industry trends, and lending principles enhances the team’s ability to assist clients with their real estate finance issues. When structuring transactions and drafting loan documentation, the team’s collective background positions SREF attorneys to meet the needs of the group’s clients, mitigate their potential risks, and augment their customer relationships.

Seyfarth Shaw is a full-service law firm with over 750 attorneys located in nine offices throughout the United States including Chicago, New York, Boston, Washington D.C., Atlanta, Houston, Los Angeles, San Francisco and Sacramento, as well as Brussels, Belgium. The firm provides a broad range of legal services in the areas of labor and employment, employee benefits, litigation and business services. Seyfarth Shaw’s practice reflects virtually every industry and segment of the country’s business and social fabric. Clients include over 200 of the Fortune 500 companies, financial institutions, newspapers and other media, hotels, health care organizations, airlines and railroads. The firm also represents a number of federal, state, and local governmental and educational entities.

The owners of Michigan's malls, office buildings and warehouses are getting a huge shock this month as they begin to figure out their tax bills under the state's new business tax.

Some commercial-real-estate developers are seeing 200 to 400 percent increases as the result of the switch to the Michigan Business Tax from the Single Business Tax, which was eliminated last year.

The developers say the extra burden couldn't come at a worse time.

"The real-estate industry -- particularly the income-producing real-estate industry -- is facing difficult times without the tax situation," said Joshua T. Weiner, chief executive officer of Portage-based development firm Meyer C. Weiner Co.

Commercial real-estate markets have been weak in Michigan thanks to the state's economic troubles and now are facing even greater pressure as the national economy slows, developers say.

And just as many residential real-estate markets collapsed under the weight of too many houses and an abundance of bad loans, some fear overextended commercial markets may be the next sector to be swept up in the nation's credit crisis.

"It's going to kill the marginal guy on a real thin string," said Robert M. Brown, chairman of Kalamazoo-based development company Treystar Inc. "That's what got the mortgage thing going. It starts with the people who are on real thin ice."

It's no surprise that the Michigan Business Tax, passed into law last July, shifts more the state's business tax burden onto real estate. The goal in replacing the much-maligned Single Business Tax was to lower bills for manufacturers and create incentives for companies to add employees in a state that has had one of the nation's worst unemployment rates for the past five years.

"We're prepared to pay our fair share of taxes," said Weiner, whose company is responsible for the development of the Southland Mall in Portage, the WestMain Mall in Oshtemo Township and the Kalamazoo City Centre in downtown Kalamazoo. "We were prepared to pay 10 to 20 percent more. But not multiples of four to eight times as much."

Brown's Treystar, which owns Westwood Plaza and Woodbridge Shopping Village among others, may be on the hook for a 300 percent increase in its state tax bill, he said.

"The SBT was based more on payroll," he said. "On a real-estate project, payroll is minor."

The Michigan Business Tax can claim two main improvements over the SBT, said Tricia Kinley, director of tax policy for the Michigan Chamber of Commerce: It rewards companies for basing operations and workers in Michigan and provides personal-property-tax relief for manufacturers, she said.

But in exchange, the MBT taxes gross receipts, or all revenues, Kinley said.

"The base -- what is considered a receipt -- is very large," she said. "It brings in a lot of business activity that wasn't expected."

Michigan Department of Treasury spokesman Terry Stanton said the MBT was designed to shift taxes to some industries that had paid lower rates in the past.

"Some will see an increase in liability simply by virtue of having faced limited treatment under the SBT," Stanton said.

The increase comes on top of a market in which rents have been falling, vacancy rates are up, and some large retailers are reluctant to expand in Michigan, said Ellie Callander, president and owner of Prudential CRES-Callander Commercial, a Kalamazoo-based commercial-real-estate brokerage.

"Right now national firms, especially retailers, have indicated that Michigan is off the market," Callander said. "They're not looking to locate in Michigan right now."

Those conditions, combined with tightened lending standards and less money to loan -- fallout from the subprime-mortgage mess -- are making it very difficult for some property owners to refinance existing loans.

"Most commercial lenders don't fix rates for longer than five years," Callander said. "Many of those are coming due, and many lenders aren't writing new loans.

"The whole market is responding," she said. "There are a lot of foreclosures in commercial, just like in residential."

Some worry that significantly raising taxes on commercial property operators in this climate may accelerate loan defaults in Michigan.

"It's sort of a guarantee that Michigan will lead this cycle down," said Brown, of Treystar.

Established companies such as Treystar and Meyer C. Weiner are financially strong, their leaders say. The MBT will cut into their profits, but they will still be able to develop projects when the demand is there. And falling values create a buyer's market.

"For us, it's actually been an opportunity," Weiner said. "We have been able to get the money we need to finance or refinance our developments."

In the Kalamazoo area there also are examples of growth -- from new retail development on Stadium Drive and West Main Street to expansions planned by Kaiser Aluminum and Fabri-Kal.

Local economist George Erickcek cautioned that the effect of the new state tax will be difficult to track.

The regional economic analyst for the W.E. Upjohn Institute for Employment Research said the impact of a new business tax will be difficult to separate from other factors.

"For those concerned about change in business tax in the state, it's very difficult from the data to separate out that impact from the storm of the slowdown in the overall national economy," Erickcek said.