Commercial real estate is complex. Yet, real estate companies are just like any other company in that even the biggest and most successful businesses have problems if their corporate governance is not in order.
Governance decisions have lasting effects on how a business operates, how it attracts capital, how it manages liability, and whether it can scale. At Upshaw & Ware, addressing your corporate governance needs is one of the most important things we do for our clients.
Entity Formation and Structure
The choice of entity and how it is structured can make or break your venture. Even choosing between one state or another for registration purposes can change how your business fundamentally operates. All of this comes together to affect several aspects of your business, such as:
- Tax treatment at the state and federal levels
- Liability exposure
- Whether outside capital can be brought in
- Management’s powers and autonomous authority
- Transferability of interests
- Ability to bring in future partners
- Duties of business leadership
To help our clients address these issues, the Upshaw & Ware team carefully works on LLC formation, corporation formation, partnership structuring, and the design of holding companies and subsidiary structures in a way that is suited to real estate portfolios.
Governance Documents
Governance documents, such as operating agreements, shareholder agreements, and partnership agreements, determine how a company will actually function. Our attorneys draft these with the understanding that these agreements will be what controls when an internal dispute arises, such as:
- A disagreement between the founders
- A capital shortfall
- An unexpected offer to purchase the business
- The departure of a key person
- What duties business leadership owes to its investors
Addressing these issues at the very beginning is substantially easier before they arise. To that end, the Upshaw & Ware team drafts corporate governance documents carefully.
In the real estate world, these agreements often involve layered structures where the operating entity, the asset-owning entity, and the financing entities each have their own governance requirements that need to be able to function together as one. Ensuring that this synergy exists at the start of the venture can help prevent time-consuming and costly litigation later.
Compliance and Regulatory Matters
Real estate companies face a range of regulatory obligations that vary by asset type, transaction structure, and jurisdiction. We advise on compliance matters arising in commercial real estate operations, including requirements imposed by lenders, investors, and applicable law. For companies that raise capital from outside investors or that operate pooled vehicles, we work through ongoing compliance obligations in coordination with securities counsel.
Growth and Restructuring
As real estate companies grow, their governance structures often need to grow with them. What works for a two-person development partnership is not suited to a company managing a multi-asset portfolio with outside investors, institutional lenders, and employees. We advise on governance restructuring as businesses scale, such as by reorganizing entity structures, updating operating agreements, and implementing the internal processes that larger operations require. The Upshaw & Ware team also handles the corporate matters that arise in the context of commercial real estate transactions: entity due diligence, formation of acquisition vehicles, cross-entity guaranty arrangements, and the corporate aspects of purchase and sale agreements.
The Upshaw & Ware Difference for Your Corporate Governance Needs
Our attorneys have many years of experience from large law firms and from in-house roles at major corporations like Home Depot, Georgia-Pacific, and The University of Georgia. This means our team brings this operational perspective to every governance document we draft. We carefully consider what decisions will go to the board or the members, whether structural choices could create problems in the future, and how to best prevent these issues before they become issues in the first place. Contact us today.