9012011 Informal Interpretation

(redacted)

Premerger Notification Office
Bureau of Competition
Federal Trade Commission
600 Pennsylvania Avenue, NW, Room 303
Washington, D.C. 20580

Re: Leasehold and Fee Purchases

Dear Mr. Sharpe:

This letter confirms our conversation to day regarding the Federal Trade Commissions (FTC) position with respect to the simultaneous purchase of a leasehold interest in real property and the leased fee interest (reversionary interest) in that same real property. When a leasehold interest in real property is purchased for a premium and the reversionary interest reportable in that property is also purchased simultaneously, the leasehold portion of the acquisition is not reportable, but the fee purchase may be reportable if the filing threshold requirements are met. This is true even though the leasehold property may contain revenue generating operations such as a golf course. The rationale for this position is that because the buyer will be acquiring title to the property, the buyer will be deemed to have cancelled the lease and therefore the reversionary interest acquisition is the transaction that is of interest to the FTC.

Very truly yours,

cc: (redacted)