The Legal 500

There was very little reportable activity in 2008 due to the credit crunch, with many firms announcing no significant transactions at all for the year, amd most work going on behind the scenes in the re-financing and restructuring fields. With so few example transactions to draw from in 2008, many of the deals reported here are historic and are used simply illustrate the capabilities of firms.

The first section focuses on the top firms in the finance sphere. Capital markets ruled the roost in real estate finance prior to 2007 as the majority of loans were re-packed through securitisation vehicles and sold into the markets as bonds. But this activity has now disappeared. For now, the tiny trickle of fresh finance flowing into real estate is remaining on the balance sheets of lenders and the majority of work for lawyers involves re-financing and restructuring legacy deals in distress, or at risk of becoming so.

The second section is concerned with firms involved in corporate real estate transactions, namely advice to companies and funds active in the real estate business, as opposed to ‘nuts and bolts’ real estate work. Private equity and REIT-related work falls into this category, as does advising companies and partnerships on their corporate-level borrowing from banks. As with finance work, the emphasis for most corporate real estate firms involves advising clients through the painful process of restructuring, refinancing and general help through the downturn.

Section three is all about firms involved in the New York ‘dirt’ real estate market, classic real estate work such as acquisitions of individual properties, leasing and development work; essentially any work at the individual property level. Note that as mortgages are secured against individual properties, refinancing and distressed issues also apply in this area.

The final section concerns full service firms that also have significant land use and zoning practices, work on building regulations, zoning laws, permits, environmental issues and the like. Land use and zoning projects tend to take years from start to fruition, so this area is slightly more insulated from the downturn than other areas of real estate, but it is far from immune.

Dechert LLP

PRACTICE: With over 30 attorneys across its New York and Charlotte offices specialising in real estate finance, Dechert LLP remains a top player in both lending and capital markets. The practice has built extensive experience by advising all parties in complex finance transactions and is notable for its long-standing advice to rating agencies, giving it a birds-eye view of the entire market. Clients relate it is ‘very good in all aspects of finance’ as a result of this comprehensive 360-degree view, and it is highly rated for having the ‘capacity to bring the various disciplines together on a deal as is needed’. It also garners praise for the ‘high quality work’ and ‘good level of expertise’ of its attorneys, who are ‘good communicators’ and ‘always responsive’.

Following on from its notable work advising the mezzanine investors in Blackstone’s record-breaking acquisition of Equity Office Properties, the practice continues to be a first choice for holders of mezzanine tranches, with its ongoing work for the junior mezzanine lenders in the $26bn Blackstone/Hilton acquisition of particular note.

CLIENTS: Major clients include JPMorgan, Morgan Stanley, Goldman Sachs, Wachovia Bank, Credit Suisse, Gramercy Capital, Brookfield Real Estate Financial Partners, the government of Singapore, CBRE Realty Finance, GI Real Estate and Capital Trust.

INDIVIDUALS: Dechert LLP has ‘very smart attorneys who understand structured finance and give outstanding customer service’ at a ‘very reasonable price’. Mezzanine finance guru Laura Ciabarra, who advised on the Blackstone and Hilton deals, has a significant client following. Clients state that ‘no one holds a candle to her’ for complicated big-ticket deals. Larry Ceriello, who is praised as ‘friendly’ and ‘a good negotiator’, offering clients ‘excellent knowledge’ and being ‘very good with opposing counsel’, is also a key individual. Richard Jones, described as a ‘great attorney who always bridges the gap between legal and business decisions’, is also recommended.

Cadwalader, Wickersham & Taft LLP

PRACTICE: Cadwalader, Wickersham & Taft LLP made huge layoffs in response to the sudden disappearance of the CMBS and securitization markets upon which the firm had made a name for itself. Yet while some may claim this means ‘the firm is in serious trouble’, in truth the slimmed down practice has merely re-matched itself to the new needs of its broad client base, which in a downturn are significantly different to what they were previously.

Described as a ‘volume securitization practice built around a quality core’, the firm’s ‘extremely intelligent’ core of six real estate finance partners is sufficiently versatile to make do in the new environment. The group has kept busy with investment bank asset sales and shifted focus to distressed situations, and the firm’s expertise in securities will attract vulture funds seeking opportunities when the market gets moving.

CLIENTS: A diverse range of players in the world of high finance, including General Electric Capital, Goldman Sachs, Bank of America, Citigroup, HSBC, Morgan Stanley, JPMorgan, Credit Suisse, UBS Securities, Teachers Insurance and Société Générale.

INDIVIDUALS: Fredric Altschuler is clearly a leading individual in real estate finance and ‘understands all nuances’, according to clients. William McInerney is seen as an ‘exceptional’ attorney, while ‘nothing is ever lost’ on Christopher White, the chairman of the firm’s real estate department.

Skadden, Arps, Slate, Meagher & Flom LLP

PRACTICE: Skadden, Arps, Slate, Meagher & Flom LLP’s client list includes many top Wall Street names, although it is with Deutsche Bank that the firm enjoys the strongest relationship in New York for real estate finance transactions. The firm’s New York real estate group numbers 40 attorneys, 11 of them partners, and handles the majority of Deutsche Bank’s work. Recent highlights include advising on the restructuring of $1.9bn worth of complicated, highly structured debt secured against the General Motors Building. The ‘very highly thought of’ group also benefits from the firm’s international network, making it an attractive choice for cross-border work.

CLIENTS: Deutsche Bank remains the firm’s most active client for real estate finance matters, although other lender-side clients include rival major lenders such as Merrill Lynch, ING Real Estate and Bank of America.

INDIVIDUALS: Harvey Uris, who leads the firm’s global real estate finance practice from New York, has broad experience across capital markets and finance transactions involving real estate assets. He is praised for his ‘exceptional legal skills’ in addition to being ‘business minded’, and is instrumental in building the firm’s relationship with Deutsche Bank. Also worth a mention is securitization partner David Wolin who impresses with his ‘forward thinking intellect’.

Cleary Gottlieb Steen & Hamilton LLP

PRACTICE: As Cleary Gottlieb Steen & Hamilton LLP never operated a ‘silo’ business model in real estate securitization or CMBS, it is perhaps less damaged by the financial markets paralysis than most. The five New York real estate partners are extremely versatile, with each developing experience of a variety of different transactions across the corporate, finance and dirt spheres through the years, and share among them an ‘unsurpassed ability to work through difficult issues’. This should ensure the group is well equipped whichever way the finance market evolves, and the wider firm’s global focus will continue to provide an interesting range of cross-border work. Acting for Goldman Sachs on the financing of the €4.5bn acquisition of department stores from Arcandor was a notable highlight for the firm.

CLIENTS: Deutsche Bank, UBS and Goldman Sachs are stand-out clients on the lender side.

INDIVIDUALS: Michael Weinberger, who ‘is able to craft solutions to problems that benefit both sides of a deal’ and who has ‘an excellent knowledge of the business’, has been key in developing the firm’s relationship with Goldman Sachs, while Steven Horowitz is an ‘excellent attorney’ and ‘a trusted advisor’.

Kaye Scholer LLP

PRACTICE: Kaye Scholer LLP bucked the trend of doom and pessimism in 2008 by recruiting two new structured finance partners, taking on Janet Barbiere and William Cullen from the now dissolved Thacher Proffitt & Wood. It will be interesting to see how the firm deploys its enhanced securitization capabilities going forwards, however. The firm’s client base, which is unusual in that it features a very high proportion of overseas lenders, perhaps kept the firm more active than many real estate finance teams through 2008, particularly during the early part of the year, mostly on origination matters. Highlights for 2008 include acting for HSH Nordbank on a $750m acquisition and construction loan for the Manhattan House project in New York, and advising RBS Greenwich Capital on a $660m mezzanine loan workout.

CLIENTS: Noteworthy clients include RBS Greenwich Capital, Anglo-Irish Bank, Bank of Scotland, Bayerische Landesbank, Citigroup, Goldman Sachs, HSH Nordbank, Hypo Real Estate Capital Corporation, Royal Bank of Scotland, UBS Real Estate Securities and Wachovia.

INDIVIDUALS: The firm is characterised by ‘steadfast personalities’ across the board. Warren Bernstein is singled out for his ‘business acumen’ and ‘technical competence’, while Stephen Gliatta gains plaudits for his ‘expert overall service’ and ‘leadership’.

Sidley Austin LLP

PRACTICE: Eight-partner Sidley Austin LLP comes ‘highly recommended’ by its clients who rate the practice’s ‘outstanding bench of partners and associates’, praising it for the ‘thorough and very comprehensive’ advice it offers. Although finance and securitization is the real estate department’s main forte, it also has surprising capabilities in the transactional areas of real estate. Recent highlights for the team include representing Drawbridge Special Opportunities Fund on the workout and restructuring of a $1.2bn loan to Macklowe Properties related to the acquisition of Equity Office Properties.

CLIENTS: A good selection of banks and funds instruct the firm, including Citigroup, Credit Suisse, Deutsche Bank, JPMorgan, Wachovia Securities, Fortress Investment Group and Starwood Capital Group.

INDIVIDUALS: Clients rate in particular Michael Peskovitch and Robert Golub as ‘smart, dedicated and thoughtful’ attorneys who ‘understand the business better than their competitors’ and are ‘practical, deal-oriented counsel’. Also singled out for praise is Martin Gold who boasts a ‘long range institutional memory’ that is appreciated by clients who instruct the firm repeatedly.

Clifford Chance

PRACTICE: Clifford Chance enjoys excellent relationships with key lending banks almost everywhere in its global network. This is also the case in New York where clients appreciate it as a ‘global and capable’ firm that has particularly prowess in finance, an area where it is deemed ‘literally perfect’ and ‘within the top 5%’ due to its ‘outstanding service’. Unsurprisingly, given its global footprint, it is particularly popular for cross-border, multi jurisdictional work. Recent highlights include acting for Morgan Stanley Mortgage Servicing on its role as administrative agent on a $2.5bn revolving credit facility and its syndication to three lenders in Europe.

CLIENTS: Clients include JPMorgan, Sumitomo Mitsui, Morgan Stanley, Yes! Investors, Jumeirah, Northstar Financial, Citigroup, Capital Trust, Mizuho Corporate Bank and Goldenbridge Advisors.

INDIVIDUALS: Clients ‘could not be happier’ with the ‘well coordinated’ and prompt services of Ness Cohen and Jay Bernstien, two of the key partners in the firm’s New York real estate team.

Greenberg Traurig LLP

PRACTICE: Greenberg Traurig LLP’s intent to become a significant force on the New York real estate finance scene became apparent in 2007 when the firm took on 14 real estate finance attorneys from Solomon & Weinberg. Some say that with hindsight this was a mistake considering the current paralysis of the capital and lending markets. However, the firm’s ‘very good talent pool’ can focus on another strength for now, mezzanine finance, as it involves skill sets that can be easily transferred to distressed situations. Recent highlights include advising SL Green on a $135m mezzanine loan. Another stand out deal involved advising a major real estate developer on a construction financing worth over $700m.

CLIENTS: Key clients include Gramercy Capital, Square Mile Capital Management, Credit Suisse, Hypo Real Estate Capital, Natixis, PJSC-JOSS Real Estate Partners and SL Green.

INDIVIDUALS: Gary Kleinman is the key contact for capital markets and finance matters at the firm, while special mention must be made of head of national real estate Robert Ivanhoe who is credited for his ‘ability to bring about business solutions’.

Latham & Watkins LLP

PRACTICE: Latham & Watkins LLP rates highly with a number of clients who have developed ‘the highest opinion of its work’ having experienced its ‘first class, timely and extremely responsive’ service.

The four-partner New York team is recommended for sophisticated loan workouts, restructurings and distressed debt transactions, in addition to being equally adept at handling more traditional finance and capital markets deals and boasting substantial expertise in the mezzanine finance area. Sporting a good balance of lender and borrower-side work, it ‘has all angles covered’.

Recent highlights including advising a major financial institution as a mezzanine lender in a $7bn loan restructuring, and representing another major financial institution on the syndication of a $1.3bn mortgage loan secured on the GM Building in New York.

CLIENTS: Clients include Barclays Capital, BlackRock Financial Management, Citigroup, GE Capital, Credit Suisse, Flagstone, JPMorgan and Stahl Real Estate.

INDIVIDUALS: Richard Chadakoff, head of the firm’s ‘hard working’ global real estate practice, is an ‘intelligent and experienced real estate attorney who is intuitively oriented toward making a deal work without sacrificing the interests the client’. Also rated are the ‘bright, practical and experienced’ James Hisiger, and the ‘skilled and extremely competent’ Michelle Kelban, who ‘interacts extremely well with clients’ and was recently promoted to partner.

Morrison & Foerster LLP

PRACTICE: Morrison & Foerster LLP’s New York office has traditionally had a strong focus on real estate finance having developed strong relationships with a number of key banks over the years. The large group remains well resourced to handle most deals and is packed with ‘very smart attorneys who understand structured finance and give outstanding customer service’.

CLIENTS: ING, Apollo Real Estate, JPMorgan, Eurohypo, Dubai Investment and GE Capital are among the firm’s clients for real estate capital markets and finance work.

INDIVIDUALS: Mark Edelstein is praised for his ‘great work’, while Christopher Delson is also a prominent figure.