Exhibit 8.1
[Shearman & Sterling Letterhead]
May 21, 1998
Clarion Commercial Holdings, Inc.
335 Madison Avenue
New York, New York 10017
Dear Ladies and Gentlemen:
We have acted as counsel to Clarion Commercial Holdings, Inc., a
Maryland corporation (the "Company"), in connection with the preparation of a
Form S-11 registration statement (the "Registration Statement") filed with
the Securities and Exchange Commission on March 13, 1998 (No. 333-47887), as
amended through the date hereof, with respect to the offering and sale (the
"Offering") of up to 11,500,000 shares of common stock, par value $0.001 per
share, of the Company (the "Common Stock"). You have requested our opinion
regarding certain U.S. federal income tax matters in connection with the
Offering.
In giving this opinion letter, we have examined (i) the Company's
Articles of Incorporation, as duly filed with the Secretary of State of the
Commonwealth of Maryland on February 13, 1998 and amended on May 12, 1998;
(ii) the Company's Restated and Amended Articles of Incorporation, a form of
which is filed as an exhibit to the Registration Statement; (iii) the
Company's Bylaws; (iv) the Registration Statement, including the prospectus
contained as part of the Registration Statement (the "Prospectus"); and such
other documents as we have deemed necessary or appropriate for purposes of
this opinion.
In connection with the opinions rendered below, we have assumed, that
(i) each of the documents referred to above has been duly authorized,
executed, and delivered; (ii) each of the documents referred to above is
authentic, if an original, or is accurate, if a copy, and has not been
amended; (iii) during its short taxable year ending December 31, 1998 and
future taxable years, the Company will operate in a manner consistent with
the factual representations contained in the certificate, dated May 15, 1998
and executed by a duly appointed officer of the Company (the "Officer's
Certificate"); (iv) the Company will not make any amendments to its
organizational documents after the date of this opinion that would affect its
qualification as a real estate investment trust (a "REIT") for any taxable
year; and (v) no action will be taken by the Company, after the date
hereof, that would have the effect of altering the facts upon which we have
based the opinions set forth below.
In connection with the opinions rendered below, we also have relied upon
the correctness of the factual representations contained in the Officer's
Certificate. No facts have come to our attention, however, that would cause
us to question the accuracy and completeness of the facts contained in the
documents and assumptions set forth above, the representations set forth in
the Officer's Certificate, or the Prospectus in a material way.
Based on the documents and assumptions set forth above, the
representations set forth in the Officer's Certificate, and the discussion in
the Prospectus under the caption "Federal Income Tax Considerations" (which
is incorporated herein by reference), we are of the opinion that:
(a) commencing with the Company's short taxable year ending December
31, 1998, the Company will qualify to be taxed as a REIT pursuant to sections
856 through 860 of the Internal Revenue Code of 1986, as amended (the
"Code"), and the Company's organization and proposed method of operation will
enable it to continue to meet the requirements for qualification and taxation
as a REIT under the Code;
(b) the descriptions of the law and the legal conclusions contained
in the Prospectus under the caption "Federal Income Tax Considerations" are
correct in all material respects, and the discussion thereunder fairly
summarizes the federal income tax considerations that are likely to be
material to a holder of the Common Stock.
We will not review on a continuing basis the Company's compliance with
the documents or assumptions set forth above, or the representations set
forth in the Officer's Certificate. Accordingly, no assurance can be given
that the actual results of the Company's operations for any given taxable
year will satisfy the requirements for qualification and taxation as a REIT.
We note that our opinion expressed herein is based on our examination of
the law, our review of the documents described above, the statements and
representations referred to above, the provisions of the Code, the
regulations, published rulings and announcements thereunder, and the judicial
interpretations thereof currently in effect. This opinion will not be
binding on the Internal Revenue Service (the "Service"), and there can be no
assurance that the Service will not challenge the conclusion stated herein or
that, if the issue were decided in court, such a challenge would not
ultimately succeed. Further, there can be no assurance that future
legislative or administrative changes or future court decisions or the
inaccuracy of any statements or representations on which we have relied may
not significantly affect the continuing validity of this opinion.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the references to Shearman &
Sterling under the caption "Federal Income Tax Considerations" in the
Prospectus and consent to the summarization of our opinion therein. In giving
this consent, we do not admit that we are in the category of persons whose
consent is required by Section 7 of the Securities Act of 1933, as
amended, or the rules and regulations promulgated thereunder by the
Securities and Exchange Commission.
The foregoing opinions are limited to the U.S. federal income tax
matters addressed herein, and no other opinions are rendered with respect to
other federal tax matters or to any issues arising under the tax laws of any
other country, or any state or locality. We undertake no obligation to
update the opinions expressed herein after the date of this letter.
Very truly yours,
/s/ Shearman & Sterling