Question
(redacted)
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Premerger Notification Office
Bureau of Competition
Federal Trade Commission
600 Pennsylvania Avenue, NW, Room 303
Washing ton, D.C. 20580
Re: Applicability of Hart-Scott-Rodino Act Disclosure Requirements o Acquisition of Office Buildings
Gentlemen:
This is to confirm my telephone conversations with Richard Smith, Esq. and with Victor Cohen, Esq. of your office, in which we have been advised as follows:
STAFF COMMENT: OK
1. The Federal Trade Commission staff continues to consider the acquisition of office buildings as being exempt from the premerger notification and waiting period requirements under the Hart-Scott-Rodino Act; provided that the office building acquired does not include $15 Million or more of retail space.
STAFF COMMENT: Sounds OK to me
2.Space occupied and used by a bank for its customer operations, i.e. retail operations, is considered to be retail space but space used for that banks executive offices and other business offices is not covered retail space.
STAFF COMMENT: 38756
As reflected by the Federal Register at Page 38754 (September 24, 1985), the staff has considered the acquisition of office buildings (in addition to unimproved land and residential properties) as being exempt as an acquisition in the ordinary course of business, subject to an exception where a office building includes retail space valued at $15 Million or more. In accordance with our telephone conversation with Mr. Smith, it is our understanding that the staff continue to issue informal advice that the acquisition of office building is exempt form the Acts notification and waiting period requirements, subject to the $15 Million retail space exception, although the proposed rule amendments reflected in the Federal Register, which would have formalized this advice, was not adopted.
Our client, which has assets in excess of $100 Million, (redacted) is presently negotiating the purchase of an office building from a limited partnership with assets in excess of $60 million. It is presently contemplated that this transaction will close prior to March 30, 1989. The office building which is presently under construction by the Seller includes some retail space, including space leased to a bank for its Main Branch office but the fair market value of such retail space is less than $15 Million.
Accordingly, the (redacted) intends to proceed to complete negotiations, consummate and close the transaction without filing the Notification and Report form, in accordance with the advice received from Mr. Smith and Mr. Cohen, unless you advise us that filing is necessary.
If our understanding as set forth in this letter is not correct, please notify us as soon as possible. If we do not correct, please notify us as soon as possible. If we do not hear further from you, we will proceed as set forth herein.
Your assistance and prompt consideration of this matter is deeply appreciated.
Very truly yours,
cc: (redacted)