United States > Real estate and construction > Overview
The real estate market remains swamped with distressed and troubled assets, making workout and restructuring transactions a prominent part of many law firms’ practices as sub-performing and non-performing loans continue to require attention. Special servicers are still visible in the market attending to pools of CMBS loans, while lenders are beginning to take action against borrowers holding defaulted loans; as a result, more aggressive foreclosures are taking place. Transactional work has picked up and core assets in prime locations such as New York, Chicago and Washington DC are trading at higher than expected rates. Private equity investors, among others, are waiting on the sidelines to strategically deploy capital to take advantage of the weaker market conditions. Banks and financial institutions are lending again, but on different terms where loans are more closely aligned with the value of properties they are secured on. The leasing market remains resilient, but development of new office, retail and hotel space is slow, although the senior living, medical office and industrial development sectors are stronger.
The real estate ranking focuses on law firms that can present national capability – either real estate finance work for national and international caliber clients, or property transaction and development practices that can demonstrate top-end quality and good geographical reach. There is also space in the rankings for high-caliber regional practices. Real estate investment trust (REIT) expertise is noted throughout the section, but more detailed and specific coverage of REITs can be found in a dedicated section in our Investment Fund Formation and Management chapter.
There are promising signs of improvement in the construction legal market; many firms are thriving on a diet of hospital, energy and transport infrastructure projects, funded by the government’s economic stimulus. On the contentious side, bid protests on public sector projects are on the increase, and projects failures have been an abundant source of disputes, with many firms now responding to client demand for cost-effective ADR. In 2011, a dramatic shake-up of lawyers took place, following the demise of the highly regarded Howrey LLP, with Jones Day and Pillsbury Winthrop Shaw Pittman LLP among the firms benefiting. The construction ranking aims to reflect both litigation and transactional capabilities, in addition to the geographical scope of firms’ instructions and national profile, with due account given to highly regarded regional outfits.
The land use market is suffering from the shortage of bank loans amid the recession, and lawyers are facing a lack of new projects in the planning stages of development. This is evident across the board, but particularly in the highly distressed states of Florida, Nevada and Arizona. In 2010, typical engagements included redevelopment programs, ongoing entitlement processes and land use matters relating to the construction of renewable energy infrastructure, in response to government initiatives. The land use ranking identifies firms with strong state-wide reputations and local political connections, while giving credit to firms which handle instructions from multiple offices and have a broader national profile.