Sacramento: We Are Finally On The Radar!


As we celebrate another banner year of commercial real estate with the 26th annual Broker of the Year awards, we also should take note of some of the accolades recently bestowed upon our fair city: Top “Game Changing” Northern California City: Sacramento (Sunset Magazine, February 2018); America’s stealthy farm-to-fork capital (Thrillist, January 2018); Ranked 5th on the Forbes list of best cities for job seekers (Forbes, May 2017), beating out every other California city. Bloomberg News recently noted a “flood” of San Franciscans seeking less expensive housing into Sacramento, which has contributed to both Sacramento’s multi-family rent increases (the 2nd highest percentage increases in the nation, just behind Tacoma, Washington) and a rise in housing costs (which costs rose 10% compared to 2016 prices). We even had an academy award nominated movie, “Lady Bird”, which featured our fair city. (We were beaten out by a movie about a fish! Go figure.) The Wall Street Journal called Sacramento “California’s Newest Real-Estate Hot Spot” (WSJ, May 2017), proclaiming that “Sacramento, Calif., long seen as a fairly bland government town, is in the midst of a real estate boom.”

So, what has caused all of this “buzz”? Certainly, the development of the Golden 1 Center and “DoCo” (including the uber hip Sawyer Hotel) was a major catalyst, but Sacramento also has bevy of other “cool” and “hip” projects that make national investors stand up and take notice, including the Ice Blocks project by Heller Pacific, with its heavy timber construction; the new B Street Theatre at the Sophia, which was financed through a $29 million public-private partnership with the California Infrastructure and Economic Development Bank; and the Barn in West Sacramento and the Milagro Centre in Carmichael with their unique designs and concepts. Centene Corporation, one of the largest health care companies in the country, executed a 175,000 square foot lease in Rancho Cordova in 2017 (one of the largest in the Sacramento area last year), and is contemplating a headquarters site in North Natomas, all of which will bring much needed high paying jobs to the Sacramento region.

Aside from retail, office and industrial development, Sacramento real estate is thriving in arts and tourism as well. In addition to the new B Street Theatre at the Sofia, the City of Sacramento will soon invest about $189 million in renovations and expansions of the Sacramento Convention Center, Memorial Auditorium and the Community Center Theater, all of which will continue to bolster Sacramento as a tourism and arts destination. Adding to the enthusiasm for Sacramento is the future development of the Railyards, the largest infill project in the United States.

All of the above translates to an excitement and energy that is palpable, and promises to result in increased interest in Sacramento commercial real estate for years to come. Stewart Ward & Josephson is proud to be an integral part of serving the commercial real estate and banking community, and to have participated in the growth of this great city, by representing many of the principals in the projects previously mentioned. We congratulate all of tonight’s award recipients, and look forward to another exciting year in commercial real estate for 2018.

Getting better, cheaper results from your lawyer in real estate transactions


Lawyers are expensive, and good lawyers are very expensive. That information comes as no surprise to you, but did you know that there are techniques a client can use to reduce legal costs in commercial real estate transactions? Clients often focus on a given lawyer’s hourly rate when considering the ultimate cost of legal services, which is understandable and appropriate, but the hourly rate is only one factor – there are lots of strategies that a savvy client can employ to keep costs down while at the same time increasing the likelihood of a faster, better deal outcome.

The lawyers in our firm have a combined experience of more than 70 years in handling commercial real estate and business transactions, and what follows is some of our hard-earned wisdom about how to work with lawyers for an optimal result:


No lawyer can be an expert in all areas of the law; there’s simply too much law for any one lawyer to know these days. While a purported “general practice” attorney who handles all sorts of matters might charge a lower rate than a lawyer with lots of experience in commercial real estate transactions, it’s a false economy. A lawyer with proven, relevant experience knows which issues to focus on and which to ignore, and what the customary compromises are, whereas an inexperienced one will often obsess over the wrong issues. So, using an experienced attorney could result not only in saving hours of legal time, it will likely yield an outcome whereby the issues on which the experienced practitioner focused have positive economic consequences in the future.


Are you interested in being highly protected, or do you just want a quick review? What are the critical issues for you? Clients often say “Don’t kill the deal—but I want to be protected!” That sort of statement does not give meaningful direction to the attorney. A better approach is to identify the issues that are really critical – e.g., a financing contingency in a purchase and sale agreement or a specific “drop dead date” for delivery in a lease.


Since letters of intent are typically nonbinding, clients often gloss over the finer points of such documents, with the expectation that they can always renegotiate the unfavorable provisions later.

Our experience is that such an approach is risky, and often leads to acrimony; no one likes to be re-traded on deal points, and re-trading can undermine the trust that is essential to making transactions go smoothly. We think a better approach is to either insist that the provision be written in a manner that is acceptable to the client, or, at minimum, add language that allows some wiggle room. For example, if the tenant in a lease negotiation insists on attaching to the letter of intent a list of exclusions from operating expenses, the landlord should either take the time to surgically modify the list of exclusions, or add equivocating language such as “the attached list of exclusions remains subject to Landlord’s review” or “subject to review by Landlord’s counsel.”


It’s surprising how often clients are stingy with background information and deal terms. The best course of action is to anticipate what the lawyer will need, and provide it at the outset. An obvious and common example is amendments to leases and purchase and sale agreements. The lawyer can’t prepare the amendment unless provided with the existing documents. If the deal involves a letter of intent, or other correspondence, provide those documents to the lawyer. If you are asking the lawyer to document a deal for which there is no letter of intent, it is a good practice to take the time to think through all the business terms and provide the lawyer with a comprehensive, written outline. The alternative is that you can pay a lawyer to ask a long list of strictly factual questions such as “Who, precisely, is the Tenant?” “Are you charging a Security Deposit?” “Is there a Guarantor?” “Is it Landlord-controlled buildout, or a Tenant-controlled build-out?” No matter how smart your lawyer is, she is probably not a mindreader, so it’s most cost-effective to anticipate what facts she will need to do the best job for you.


Sophisticated clients generally know how much leverage they have in a transaction at the outset, and have a good sense of how a given issue is typically resolved. Occasionally, however, we see clients who might be inclined to stake out a position that, in our view, is overly aggressive. In that circumstance, we generally counsel them to moderate their position to bring it in line with what we would view as a customary outcome. In our experience, it’s simply more cost effective to reach a fair resolution early in the deal. For example, it’s not generally reasonable for a tenant under a long-term lease to have an early termination option. Because it would be rare landlord who would grant such an option without compensation, the most efficient approach is to offer the landlord a fair buy-out payment in consideration for the option (typically, the unamortized balance of the tenant improvements, commissions and other landlord costs, plus interest and some additional compensation, such as several months of rent).

Using the above tips likely will both reduce your legal fees and ensure a smoother transaction, resulting in a successful result for all parties.


This article does not constitute legal advice. Readers should consult with their own legal counsel for the most current information and to obtain professional advice before acting on any of the information presented.


Tom Stewart is a partner of Stewart Ward & Josephson LLP, and has more than 30 years of experience in handling commercial real estate transactions.; 916-569-8121.

Winnie Ward is a partner of Stewart Ward & Josephson LLP. She specializes in office, retail and industrial commercial leasing, as well as real property acquisition and divestment. Ms. Ward currently serves as a Director at Large on the Board of Directors for the Association of Commercial Real Estate.; 916-569-8161.

Gregg Josephson is a partner of Stewart Ward & Josephson LLP, and specializes in corporate and finance matters, representing numerous financial institutions, borrowers, corporations and developers.; 916-569-8131.

Three departing Downey Brand partners plan commercial real estate, transaction lending practice

The Sacramento Business Journal – Apr 2, 2014

Three partners from Downey Brand LLP will launch a new firm called Stewart Ward & Josephson LLP on April 7.

Tom Stewart, Winnie Ward and Greg Josephson are among eight partners who announced plans Tuesday to leave Sacramento’s largest law firm. The other group of five lawyers, including former Downey Brand managing partner Jeff Koewler, are still making final arrangements for their new firm.

Read Full Article

Write it down, take a picture: It’s finally spring in Sacramento – Mar 21, 2014

If you believe the commercial real estate economy in Sacramento is finally in recovery mode, and you’re predicting much brighter days lie just ahead, you’re in good company…

Read Full Article