Haynes Boone’s Real Estate Practice Group is excited to introduce the summer edition of HB Real Estate Insights. We hope you enjoy this read.
Eliminate Environmental Roadblocks Through Insurance
Too often concerns over environmental contamination impede negotiations in business transactions—especially those involving commercial property. These environmental risks can take many forms: known or potentially unknown on-site contamination, liability for off-site contamination (e.g., through waste disposal or transport activities), the acquisition of environmental liabilities through assumed contracts and so on.
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What Canadian Investors Need to Know About FIRRMA Before Entering U.S. Real Estate Deals
As Canadian investors continue to increase their exposure to U.S. commercial real estate, understanding the national security review process for foreign investment has become more important. One critical consideration is the role of the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) and the Committee on Foreign Investment in the United States (CFIUS) in regulating certain real estate transactions involving non-U.S. investors.
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2025 New York Insurance Academy Key Takeaways
Thank you again to everyone who attended our Inaugural New York Insurance Academy. Our key takeaways, with a focus on acquisition risk, included:
1. As a general matter, this is a good time to be in the market for insurance products intended to manage risks associated with acquisition liability such as cyber, D&O and reps & warranties insurance.
2. Minimizing acquisition risk requires the acquirer to focus on due diligence both in terms of assessing potential liability as well as the insurance to protect against the financial impacts of such liability.
3. Likewise, minimizing acquisition risk associated with cyber risk, requires significant diligence into the threats against a target company, how the target company is protecting itself against such threats, and the insurance available to provide bottom-line protection in the event that cyber threat is realized.
4. While reps and warranties insurance is a good way to mitigate acquisition risk, and market conditions are favorable, the terms of these policies can and should be negotiated in tandem with brokers, coverage counsel, and deal counsel and other outside experts to ensure appropriate terms.
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Estate Planning Amid Market Volatility: Leveraging GRATs
Among other potential strategies, while the markets remain volatile, if timed right, a short-term grantor retained annuity trust (GRAT) could be an option to pass significant wealth to the next generation. Investments used to fund the GRAT that have dropped in value due to temporary volatility could be transferred to a GRAT and, assuming the investment returns to its earlier value, the difference between the low value at the time of transfer and the more reasonable long-term value will pass to the next generation without any gift tax.
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A New Path Forward For Surplus Land Owners in California
On Oct. 11, 2023, California Gov. Gavin Newsom signed into law a package of 56 bills covering many land use and tenant rights issues. Notable in this long list of new laws was S.B. 4, originally proposed several years ago and finally passed this year after several last-minute amendments.
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Published in Law360
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