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reasonable and acceptable practice throughout the commercial real
estate industry, including the Denver office market, for the
lease agreement to grant an 11.5-month period of zero rent, since
under that agreement BCE was to sublease, rather than occupy,
virtually all of Republic Plaza for about 25 years, and it
thereby assumed the risk of subleasing the approximately 29
percent of unleased, unoccupied space in that building.8
In order to secure payment on the TIAA term loan, the
purchase agreement contained certain provisions required by TIAA.
Specifically, as of the time of its closing on June 17, 1988, the
purchase agreement obligated (1) Partnership, the obligor under
the TIAA term loan and the lessor under the lease agreement, to
deliver to TIAA an irrevocable standby letter of credit initially
in the amount of $8,872,245 (TIAA letter of credit) that was to
be issued by the Canadian Imperial Bank of Commerce (CIBC) and
that was to name TIAA as beneficiary in order to secure Partner-
ship's obligations under that loan; (2) BCE, the seller of an
undivided 35-percent interest in Republic Plaza and the lessee
under the lease agreement, to deliver to Partnership an irrevoca-
8 BCE's risk under the lease agreement included its incurring
expenses in order to attract tenants, such as providing improve-
ments to the unleased, vacant space in Republic Plaza and grant-
ing rent holidays at the inception of subleases. The 11.5-month
period of zero rent granted to BCE by the lease agreement en-
hanced the ability of BCE, as sublessor, to grant rent holidays
that were consistent with commercial practice in the Denver
office market to prospective lessees of space in Republic Plaza.
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