Pankaj Raval (00:03)
Welcome back to Letters of Intent, the show where we look at how risk, leverage and incentives shape outcomes long before they show up in a deal.

Sahil (00:07)
Today we’re talking about commercial leases, not from the perspective of rent or square footage, but from the perspective of who actually bears the risk when things go sideways.

Pankaj Raval (00:16)
Today we have our returning guest of the show, my good friend, Robby Pinnamaneni.

Robbie advises tenants on commercial leasing with a focus on how lease terms interact with lender rights, ownership changes, and capital structure. He’s also been doing a lot of public facing education lately through his new venture called Leasing Lawyers, breaking down risks tenants often don’t realize they’ve accepted. It’s a fantastic social media account. I would say follow it right now.

So if you’re looking to find it right now, you can just go to the leasing lawyers underscore on Instagram and find produced some great content that is really fun to watch the leveraging AI and a lot of like fun tools to make it exciting and interesting, and also learn a little bit about leases at the same time. Robbie, welcome back to the show,

Robby S. Pinnamaneni (00:59)
you, Pankaj Thank you for having me. Sahil, always great to be back on your podcast. Love what you guys have done

Sahil (01:04)
have to say, am a follower of the leasing lawyers account and I love the way you blend expertise and humor. There’s a video where you’ve got two friends walking, I think it was a meme post, two friends are walking and there’s a guy dancing and it’s like a risk lease and the client is abandoning his attorney to go dance with this person and then kicks a drink in the attorney’s face.

Pankaj Raval (01:16)
Hahaha

Sahil (01:27)
I thought that was so funny and so accurate. I want to just kick this off just by asking, how often do you feel like that happens, that you’re trying to protect your clients from

Robby S. Pinnamaneni (01:37)
first things first, and I learned this from Pankaj years ago, I gotta give credit when credit’s due. So I have a great guy, Raj Suri, who’s been helping me kind of convey my stories and my message into kind of fun ways. So he’s the brainchild behind that video. But I think as attorneys, Sahil, we can all appreciate when we have a client, particularly now with AI and chat GPT out

doesn’t want to take our advice, that thinks they kind of already know what’s going on, thinks that they have the experience and they don’t see the landmines in the way, and they want to kind of carve out their own path. So I think as attorneys, we’ve all dealt with that kind of client.

But I think with leases, there’s a lot higher risk, right? Like people tend to focus on the mundane. They think that as lawyers we come in and focus on what is the rent number and you don’t need to pay a lawyer to negotiate what the rent number is. There’s so many other things that go into a lease well beyond rent that can have a higher impact that I think people often miss.

Pankaj Raval (02:25)
Right.

Robby S. Pinnamaneni (02:32)
And so that’s what we’re trying to get at with the leasing lawyers. We’re trying to really get into what the documents are talking about, really helping the clients understand that these are more like credit documents or credit instruments, where you need to understand like what you’re getting into, similar to how if you were to get into a loan, what would those terms look like? And so that’s how we’re approaching this. Yeah.

Sahil (02:49)
That is such a good point. I have

never thought of as a credit instrument, but you’re so right. It’s a continuing obligation and it comes with covenants just a loan does. That’s a very interesting way of looking at it. And it is complicated. I thought there was a very interesting video I saw that you shared, which is very useful. was about and.

Robby S. Pinnamaneni (03:10)
Mm-hmm.

Sahil (03:11)
you gave your audience a very simple task, which was just search for and look for these provisions. And I thought that was very perceptive in terms of you’re not forcing your audience or your clients to become attorneys, but you’re giving them a practical approach to look at things that they wouldn’t look at. Usually, like you’re saying, people are looking at the price of the lease and that’s it. No one’s looking at the other obligations. You’re breaking it down in a simple way.

I want to give you a scenario and see kind of how you approach this. A tenant signs a long-term lease, invests heavily in and then learns years later that the landlord is in mortgage default. After foreclosure, the lease itself is suddenly vulnerable. Is this a situation that you see often, and why does this kind of situation surprise so many

Robby S. Pinnamaneni (03:59)
Yeah, know, Sahil, great question. So we do see this a lot and particularly like we see it in years when there’s a big debt maturity wall happening. And so 2026, as you know, we’ve talked about this at length is one of those years where a lot of commercial debt.

is coming due. And what happens is, unless you have something called an SNDA, it’s a subordination non-disturbance and Attornment agreement in place, and we can talk a little bit more about what that means later, but we’ll just say SNDA. Unless you have one of those in place, if your landlord defaults on their loan, then the lender will come in and take

the asset and then they can just kick you out as the tenant. And so any tenant improvements that you put into the premises, any goodwill that you built in the location and kind of the premises and whatever, if have a retail store, location, all those things, they just go away. They go right out the window and you have no protection.

Pankaj Raval (04:33)
Hmm.

Robby S. Pinnamaneni (04:46)
And so that is a risk that tenants do face when they’re not thinking about sort of these outside the box, outside the four corners of the lease agreement And they need to diligence those to have that

Pankaj Raval (04:57)
and actually, Robbie, one thing we look at a lot too is like, when we do, we’ve done a decent amount of commercial leasing too. And you and I actually have worked on a couple of really big leases in LA in the past. What do tenants miss or what don’t they think about when they’re like a commercial lease or trying to get into commercial lease here in LA? What are some often like some oversights they may just not even think about?

Robby S. Pinnamaneni (05:18)
Yeah, I mean, think a lot like we talked about HVAC, right? Like HVAC is arguably one of the most expensive components to any property, right? And anyone who’s bought a home or a condo is very well aware of the risks that an HVAC can carry. But, who has to maintain that? Who has to replace

Sahil (05:29)
Yeah.

Robby S. Pinnamaneni (05:34)
Has it been maintained over the years or are you stepping into a lease where the landlord says, you’re liable for replacement, but this thing hasn’t, has been in disrepair for many, many years. And so you’re kind of coming in at the end of the useful life and then you’re stuck, with a five figure bill,

or six figure bill depending on the premises, replacing and maintaining an HVAC. So I think some of those maintenance obligations, some of the infrastructure obligations, I think tenants really need to pay attention to. And then going back to when we talked about landlord mortgage default, having an SNDA in place and what an SNDA basically does, it says that,

if the landlord defaults on the loan and the lender steps in, the lender’s agreeing to keep your lease in place. And so without an SNDA, the lender could just say, hey, you’re out of here, get out of here. But if you have the SNDA in place, that means you’re saying that your lease is subordinate to the lender’s mortgage, which is what they want to their loan. And then the lender’s saying, conversely back to you, I’m going to make sure I’m not going to kick you

Pankaj Raval (06:17)
Hmm.

Robby S. Pinnamaneni (06:29)
And then the atorment part of it is basically saying if the lender does step in that you’re just going to pay them rent directly now. And so it sort of clears what would be otherwise muddy waters of what happens when that landlord defaults. And that’s why what we advise a lot of tenants now when you’re doing diligence on a place, understand what is the landlord’s balance sheet look like? What are their loan obligations? What is their financial health? What other exposure do they have going on?

Pankaj Raval (06:35)
Mm-hmm.

Robby S. Pinnamaneni (06:54)
And that can kind of help you underwrite what your risk is of being in that default scenario.

Pankaj Raval (06:59)
and actually, that’s a great point you make. and I think, we see a lot of issues come up with like cam and cam calculations as well. is one of the big ones. I think that a lot of people just kind of glaze over tenants glaze over if they don’t have a lawyer involved or a competent lawyer involved. but, I was going to ask, what are are there some make or break terms you can think of that you’ve actually advised clients to just walk away from the lease saying, hey, you know what, this is just too much risk you’re taking on.

Maybe you don’t want to do this

Robby S. Pinnamaneni (07:25)
I think there’s a lot of times, like, let’s talk about tenant improvements, right? Like, a lot of times people think the landlord’s being generous. They’re not being generous, right? It’s effectively like a loan that the landlord’s underwriting to you that you have to pay back often with some premium or some interest over the life of the lease, right? And so…

Pankaj Raval (07:32)
Right?

Robby S. Pinnamaneni (07:42)
you better be sure your business is gonna last, right? Like if you owe X hundreds of thousands of dollars in TI improvements that are amortized over a certain time period and your business doesn’t last that long, landlord might come after you for that kind of money, for that money, right? And so you gotta really start thinking about these things again as a credit document, as a loan document, because ultimately you’re going to have to pay it back in some form or

with usually some form of interest. And so I think tenant improvements is one, personal guarantees. I think a lot of commercial leases, as you know, require personal guarantees, but sometimes the terms can be very and in off market. And so I think those are ones that, tenants really need to be careful of. And I think just globally, and I think you and I have experienced this, I know we worked on some big leases and some of the big buildings in downtown LA, early on.

Pankaj Raval (08:12)
Yeah, it’s a big one.

Robby S. Pinnamaneni (08:30)
a lot of people come to me and you and us and they say, well, this is just boilerplate. This is just boilerplate. And I hate that term because I think, I think the brokers have been very good about instilling this like mantra of boilerplate so they can close the deal and get their commission. And this isn’t a knock on brokers. They serve a very useful. Yeah. Yeah. Yeah. Yeah.

Sahil (08:36)
Yeah.

Pankaj Raval (08:44)
Yeah.

Yeah. No, but you make a good point. They’re not your friend. They’re not on your side, right? They’re

Sahil (08:52)
Yeah.

Pankaj Raval (08:54)
incentivized to get the deal done and I don’t feel like that’s said enough. mean, and again, yeah, I’m not knocking them, but that is where they’re coming from. So you need to go in eyes wide open, right? Like it bothers me all the time, but yeah.

Robby S. Pinnamaneni (08:57)
Yeah.

Yeah. Eyes wide open and yeah, it’s eyes wide

open and it’s not just about getting the deal done. And I think that’s where the good, and that’s why I think like what makes us like good deal lawyers is like, look, there’s some lawyers where they just always woke up on the wrong side of the bed.

They want to poo poo every deal. They want to stop everything. They want to be the smartest person in the room. I think that’s the bad kind of counsel. Right. So I think like the lawyer has to find the balance between yes, we need to get this deal done. Like this is what the client wants. Like we need to have the view of like we’re going to help you get this done. But then the other side of that is that this isn’t boilerplate. It doesn’t have to be boilerplate. We got to pick and choose our battles. We don’t need to nitpick every single thing, but there are going to be some major things that we have to to work on in some

modify. so, and so yeah, this whole boilerplate mantra is something that I think is super challenging to deal with sometimes, particularly in the lease context, right? Like a lot of times with other contracts, think clients are used to, or they acknowledge that there’s some negotiation room for some reason, with leases in particular, people seem to think that they don’t have any leverage or opportunity to negotiate, which is just false.

Sahil (10:04)
Yeah.

Pankaj Raval (10:06)
Yeah. Yeah.

And actually just one, one other point on that is just like, really when the boilerplate is like a euphemism, oftentimes for like, just don’t ask about it or like whatever, you know, like they’re, trying to essentially gaslight you, which is, I see a lot, a lot. It was like, they got like it’s market, another term that they use it’s market or this is standard, like whenever you hear those terms, you’re concerned should go up, like the red flag should be going up in your head.

Sahil (10:08)
So.

Yeah. Yeah.

Robby S. Pinnamaneni (10:22)
Yeah. Yeah. Yeah.

Sahil (10:28)
Yeah.

Robby S. Pinnamaneni (10:28)
Yeah.

Pankaj Raval (10:30)
The light should be going on, say, hold on, let’s pay attention to this because oftentimes they’re trying to cover up something that they don’t want to discuss. And I think, good counsel, like, you, Robbie, ask like, we’ll, say, okay, hold on here. Let’s ask about this. Why, why is this market? Why is, why is this boilerplate? What makes this boilerplate? Because oftentimes you can point to examples where it’s not.

Robby S. Pinnamaneni (10:50)
Yeah.

I think that’s exactly right. like some of the, kind of going back to the, Sahil’s question on like, some of the red flags, like, we talked about sort of the tenant allowances, I think assignment and change of control. Like I had a client who has been trying to sell her business forever. And the assignment provision said that the landlord had sole discretion to approve it. And he just never approved it. Like he, he basically, he squashed like five or six opportunities over a

nine year period to sell her business. Finally, at the 11th hour, he agreed to something, but it was at like a tenth of the value of like what her first offer was. And then he asked for money on the back end to approve the consent. And so she wasn’t able to monetize her business at all. Right. She lost huge value because of an assignment or change of control provision. Another area that I see a lot of issues is on the use provisions, permitted use. A lot of people forget that that’s another

Pankaj Raval (11:39)
Interesting.

Robby S. Pinnamaneni (11:45)
boilerplate, but it’s really not. Like if you have a very narrow permitted use, then if you need to down the line in your lease, you have a 10 year lease and you’re like, hey, we need to offer this business now or we need to kind of change to, you know, with the times or economic times, you may not be able to change the use of what you’re using that premises for. If you have a very narrowly permitted use, section, and that also goes to subleasing, right? If you need at some point to get rid of part of your premises,

and cover whatever your monthly expense is, do you have the opportunity to sublet? And if the answer is yes, does the sublessee have the right to do whatever they need to do there under the permitted use provisions? And so all of these things tend to tie into each other.

Pankaj Raval (12:24)
Absolutely.

Sahil (12:25)
I

have a question. You talked about that business case where the tenant had a relationship with the landlord in terms of even the ability to sell their business. So sometimes we do see deals where somebody’s business is tied into the landlord through some kind of commission agreement or a percentage of sales. How often do you see that? And do you ever advise against those kinds of deals or are you in favor of them?

What makes that work where someone maybe has a retail shop and they’re splitting profits with a landlord? When do you see that situation happen and do you it?

Robby S. Pinnamaneni (12:56)
Yeah, I mean, I think…

I think I’ve seen it a little less and less over the years. You do see it. I think a couple of the flags are like, is this a highly regulated industry? Because a lot of times you can’t do a revenue share in a highly regulated industry. And so I think a lot of landlords and tenants sometimes forget about that, like sharing in the profits or revenue of something where you need a specific license to operate that kind of business. Right. Yeah. And so, and so I think there’s some issues there from a landlord’s perspective

Pankaj Raval (13:17)
like healthcare or like law. Yeah.

Robby S. Pinnamaneni (13:24)
It’s like why would I want to have to rely on auditing these people every month and are they sending me the right numbers and is this calculation right like it gets pretty onerous? So I’m not a I’m not a huge fan. I mean we do see them But I think again, there’s more than what you see on the surface and you really need to underwrite like from both the landlord or the tenant perspective like what are you getting into here? How can we really calculate or audit this?

Is this a highly regulated business? There’s a lot of that go into it.

Sahil (13:52)
So we talked a little bit about the red flags for tenants. Are there certain, not to say that there are, we were talking about boilerplate and how you can’t treat things just as market. You’ve got to look at what it’s really going to cost you, but, are there certain unavoidable costs for tenants? Is there a way that the responsibilities have been divided that are going to be very difficult to push away from the tenants these days?

Robby S. Pinnamaneni (14:15)
Yeah, look, I think post-COVID, we’ve seen it even in our own city here in Los Angeles, right? Like you look at Wilshire, you look at Melrose, you look at all these like iconic places where they’re just empty, right? There’s four rent signs and, you know, the commercial leasing space has suffered significantly. And I think we’re seeing some of it come back. But I think with that, you know, tenants are getting a little bit more leverage. I think there’s a little bit more negotiating leverage. I think landlords are willing to kind of come to the table and kind of bend on what would otherwise be, quote unquote, “boilerplate”

years ago. And so I do think commercial tenants do have a little bit more leverage. Obviously it depends on the geography, but kind of in this post-COVID world right now, I think that market is still making a recovery.

Pankaj Raval (14:55)
think there’s a lot of issues with leasing going on today. In the context of 2025, 2026, what we’re seeing today, you mentioned a little bit about even landlords and buildings and issues with properties. We’re seeing so many vacancies nowadays. Are there opportunities you’re seeing for people in commercial development, office space

area that you think maybe people should be looking out for?

Robby S. Pinnamaneni (15:20)
Yeah, mean, look, and great question. We’ve talked about this and I think in any market, whether it’s a stock estate market, I think when things are in distress, it’s the people with liquidity and cash that tend to prevail, right? Because they can come in and make strategic moves. And I think right now we’re seeing in this real estate market, there is this breadth of distress, even in the city of Los Angeles, a lot of multifamily, multi-unit hitting

debt maturity walls, things are taking longer, things are more expensive. So I think what we’re seeing is a lot of strategic investors that are coming in and buying mezzanine debt. And mezzanine debt is a layer of debt that sits between equity and mortgage debt. And basically the way it works is you’re not secured by a mortgage on the property, you’re secured by a pledge of 100 % of the equity interest in the entity that owns the property. And the advantage of that, and that’s what mezzanine debt is,

advantage of that is when you want to foreclose, you don’t need to go through a 12 to 18 month judicial foreclosure process. A mezzanine lender can use the UCC Article 9.

and they can do a foreclosure in 60 to 90 days. So it’s much less protracted, it’s much more straightforward, and it’s less costly than a traditional judicial foreclosure. And then within the mezzanine capital stack, there’s the inter-creditor agreement, and that governs the relationship between the different layers of debt on the property. And if you have a good and properly negotiated inter-creditor agreement,

You know, as a mezzanine debt holder, you’re collecting default interest. You know, you’re getting current pay interest while, the sponsor’s trying to figure things out. And then ultimately, if they can’t figure things out, you get the keys to the kingdom. You get the property. It’s usually cents on the dollar. So we’ve seen Wall Street do seeing people do this more in the localized level. Like I said, at these multi-unit developments in the city of Los Angeles and

other localities where you can come in, buy mezzanine debt, get the rights that you want vis-a-vis this intercreditor agreement, go through a UCC Article 9 foreclosure versus a traditional judicial foreclosure, and then you’re getting property it sends on the dollar and you’re just capturing all the upside. And so these are very strategic moves, very sophisticated investors kind of play in this arena, but I think there’s an opportunity for more localized investors to get involved as well.

Sahil (17:35)
So just a follow up question on that because that is very interesting. Who has priority then? Let’s say the property does go into foreclosure. You’ve got the mortgage company has the property itself and you’re saying the mezzanine debt has secured the company itself. So ultimately who gets the property if things go sideways?

Pankaj Raval (17:35)
Interesting.

Robby S. Pinnamaneni (17:54)
So the mezzanine, if you look at it like in a line, have the property and then above the property is the mezzanine debt holder and above that is the senior mortgage holder.

Right. And so the mezzanine they can foreclose and this all depends on what the inter creditor agreement says. So, but, you know, assuming, the ICA sort of like lends itself to this scenario that I’m describing the mezzanine debt holder can foreclose. They get control of the property, but it’s subject to the senior mortgage. So they, you can’t just extinguish the senior mortgage. It’s just that they now have taken over the property at cents on the dollar. And then they’re paying.

Sahil (18:27)
Right.

Robby S. Pinnamaneni (18:28)
they’re paying the senior mortgage as the new quote unquote property owner. So you can’t eliminate the debt that’s sort of quote unquote senior to you, but you can gain control of the asset at cents on the dollar through a fairly quick process. And then you’re subject to the senior loans. Yeah. Yeah.

Sahil (18:32)
Right, right.

Mm.

Got it, you’re stepping into the shoes of the owner.

Pankaj Raval (18:45)
Taking a subject too, interesting. Interesting.

Sahil (18:48)
So in that case, well, kind of to pivot now from the potential landlord side to a tenant side, if a tenant is signing a lease today, what would they be underwriting besides the space itself?

Robby S. Pinnamaneni (19:00)
Great question. So I think really you want to look at, ultimately the balance sheet of the landlord, right? If you can, you want to understand like what is their exposure?

Do they have a lot of debt? Are they servicing a lot of debt? What’s their financial health? You want to understand, kind of all those different things. I think you also want to understand like the maintenance records, related to the property, have the major components been maintained? Have there been inspections done? You know, the components like the HVAC, how new are they? Are they under warranty? You know, all these types of things, I think you’re going to want to look at, but really it’s, it’s understanding what, is the position of

the landlord, and if they’re going to foreclose or if they’re in a situation where they’re servicing a lot of debt, that’s going to affect like the amount of the tenant allowance that you’re getting and the terms of that. That’s going to affect the personal guarantees, that they’re requiring. Usually there’s going to be more onerous personal guarantees if the landlord’s under a lot of pressure. And then as we talked about earlier, I think, having an SND in place and being eyes wide open with that is going to be really important.

Pankaj Raval (19:34)
Yeah.

Yeah, Robbie, I mean, I love that you said this because this is so important and I think a little bit counterintuitive because oftentimes, it’s people if you’re looking to rent up space, landlord’s asking the tenant for a bunch of information, right? They’re asking the tenant to be, you know, show us all the financials, show us that you’re credit worthy, show us that you’re not going to default. But really, the sophisticated people out there should be asking the landlord the same question, right? It’s like, you guys are getting into a relationship, right? You’re not just one size asking one other party for something.

Sahil (20:07)
Yeah.

Robby S. Pinnamaneni (20:08)
Yeah. Yeah.

Pankaj Raval (20:24)
both sides should be asking people for things and you’re right. I think oftentimes things I mentioned off the bat is even at the LOI stage is like, yo, I mean, thinking about speaking of letters of intent, you know, where they really need to be asking for three years of cam, right? They need to be asking for like, you know, history and historical data, like you’re saying. Yeah, all this, yeah.

Robby S. Pinnamaneni (20:40)
Yeah, we say historical. Yeah, it’s historical. What has it

You know, what are you stepping into those types of things? Like, then kind of going back to highly regulated industries, like, you know, we’ve represented a couple cannabis clients over the year and cannabis manufacturing and production uses a lot of power and water. And so they have these huge outstanding LADWP bills that haven’t been paid for years. And then a new tenant wants to step in and they want to do something at that property. And now maybe

Pankaj Raval (20:53)
Yeah.

Yeah, absolutely.

Robby S. Pinnamaneni (21:11)
saying well we’re not going to do anything with you because you know there’s this huge bill that’s like in arrears and so you know there’s a lot of different nuances that come up depending on what the industry is but you are entirely correct that I think diligence has to go both ways it’s no longer this phase of this beauty contest of the tenant trying to impress the landlord I think the landlord also has to impress the tenant

Pankaj Raval (21:13)
Yeah.

Right.

Absolutely, absolutely. And that should be something we need to bookmark and use for our social, you know.

Robby S. Pinnamaneni (21:38)
Yeah, we’re gonna do some t-shirts.

Sahil (21:41)
Honestly, that’s the main takeaway for me from this conversation is you’re absolutely right. I’ve always thought about the landlord evaluating the tenant there are so many things that can go wrong if the tenant doesn’t evaluate the landlord. This is really, really helpful advice to anyone who to get into that kind of a relationship. And this concept, I think, Robbie, that you’ve introduced, this idea lease is a credit instrument. That is really powerful. And I think

that feels like a mindset shift that tenants need to adopt before heading into their next you had to advise a tenant before going into a negotiation, what is the single biggest mindset shift you think tenants need to make before getting into their next lease?

Robby S. Pinnamaneni (22:21)
I think really it’s like getting away from the hyper focus on rent. Obviously that matters, but you got to start thinking optionality, right? Like what if I need a different use over the years? What if I need less space? Like, do I have any contraction rights in the lease? What if I want to sell my business? What if I want to sublease part of it? What if I want to assign part of it? looking at what are my options like in this five, 10, 15, 20 year

marriage that I’m going to enter into here. Not just being hyper focused on like, what is the rent over the, you in month X and what is the escalation from year to year. Like obviously those terms are important, but again, you don’t need to be a lawyer to know those terms. Like you can go and see what that number is and you can run your numbers to see whether it makes financial sense. But it’s the optionality where I see people really miss the boat.

Sahil (23:05)
Yeah.

Pankaj Raval (23:12)
Yeah, absolutely. Fantastic. That’s super, super valuable advice. And then lastly, you know, I wanted to, before we end, I wanted to talk a little bit more about your foray now into social media as being an influencer of the leasing world. Probably the only, one of the only leasing lawyer influencers out there. Tell us a little bit more about like why you feel this public education is so important and where, and how you’ve approached kind of getting this message out there.

Sahil (23:23)
Yes.

That’s right.

Robby S. Pinnamaneni (23:35)
You know, it’s really because…

And kind of touches on what we mentioned earlier. It’s like, traditionally, I think people look at leases as like a pretty one-dimensional document, hyper-focused on like rent and square footage, boilerplate, right, as we talked about. And the more and more I’ve represented, stakeholders throughout the lease process, like these documents are very, very interesting. As we noted, they’re like credit documents. And they really kind of describe and lay out what is your business going to look like over one,

five, 10, 15 years and what are my options? Right. And so I think like it’s for me, I’ve just been fascinated on how the lease really does govern what a business optionality and ultimately exit can look like. For example, like let’s say I have, a dental practice and I want to sell the private equity. I’ve seen a lot of those deals get devalued because the lease didn’t have proper change of control or assignment provisions. Or for example, the

also owned the real estate, but chose not to have an arm’s length lease between the real estate entity and the operating entity and private equity will discount that on evaluation, right? So these documents can get very complicated and there’s a lot of nuanced implications that come from them. And so I’ve always been fascinated by that. And again, we touched on the whole mezzanine debt and that whole situation there. And while that’s more related to property ownership,

Pankaj Raval (24:42)
Mm-hmm.

Robby S. Pinnamaneni (24:58)
That’s again, very interesting to me how in a distressed situation, someone can be a strategic investor and get involved in real estate. Usually people don’t think about that. They just think about buying something for X and selling it for X plus Y, but they’re not really thinking about getting in in the middle of the capital stack and foreclosing and timing and economics and default interests and all those things. So whether it’s real estate, acquisitions and disposition or whether it’s commercial leasing, there’s so much underneath.

the first dimension of these documents and that’s what I find really fascinating.

Pankaj Raval (25:30)
Awesome. Awesome. Yeah, this has been great. You I’m taking notes here too. So I think this has been a fantastic conversation. Robbie, you’re always a wealth of real estate and leases. And also, you have a lot of operational experience in different industries like cannabis and other, other areas. So I think, you have a lot of really great insights that I think a lot of our listeners could use as they’re thinking about leasing and also real estate. If you guys want to find out

Robbie, where can people find

Robby S. Pinnamaneni (25:54)
Yeah, they can find us at TheLeasingLawyers.com on Instagram at @theleasinglawyers_ or always through Carbon Law Group as well. I work closely obviously with you guys and consider you guys more than colleagues, also family and close friends. So people can find me through any of those avenues.

Pankaj Raval (26:12)
For our listeners, leases don’t just define space, they define who absorbs risk and capital structures as they change. Sahil, any parting words as we end this?

Sahil (26:20)
Well, I just want to say this has been very, very helpful. Robbie, you are our real estate expert. I know that you have been very helpful to so many carbon clients. So for everyone listening, make sure you subscribe to Leasing Lawyers and make sure that you took some notes from this conversation. I know I’ve learned a lot. And for all of you listening, thank you again for listening to Letters of Intent. We will see you next time.