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On Nov. 19, Bisnow will bring together the industry professionals shaping the Big Apple for its New York City State of the Market event. Some of the market’s most pressing topics will be on the table, including development strategies and navigating the capital stack.
New York law firm Adler & Stachenfeld, which bills itself as “the pure play in real estate law,” specializes in complex debt and equity transactions. The firm helps its investor clients craft the terms of a deal and ensure they are covered for whatever scenario lies ahead, said C. Kim Le, partner and co-chair of Adler & Stachenfeld’s real estate department and joint ventures/corporate real estate practice.
She said having detailed JV documents helps the partners anticipate difficult conversations and avoid disputes down the line.
“When a deal and project go well, that’s great, but investors also have to think about what happens if it doesn’t,” she said. “I’m always thinking about the downside from the beginning and what my clients’ rights are if the project doesn’t perform exactly as planned.”
Le will be moderating the panel on Debt, Equity and Delivering Opportunistic Returns for Investors at the upcoming event. Click here to register.
Bisnow caught up with Le ahead of the event to discuss how CRE professionals are exploring financing and how lawyers contribute to real estate dealmaking.
Bisnow: How are your clients navigating financing today?
Le: Financing is on a debt and equity spectrum and can include mortgage debt, preferred equity, mezzanine debt or joint venture capital. Along this spectrum, I'm seeing a greater willingness to consider creative debt and equity combinations, whether it's for new deals, recapitalizations or refinancings of existing deals.
Traditional mortgage financing is getting tighter, so clients are spending more time exploring more flexible capital and structuring the capital stack up front, as opposed to treating financing as something that you deal with after the deal gets negotiated.
They’re spending a lot more time thinking about the creation of the capital stack at the very beginning of the deals: what kinds of capital are the right fit, what risks each capital provider is willing to take and how all the different pieces work together. Some clients are treating financing as part of their ordinary course diligence. In some instances, they’re even negotiating all the loan documents as part of the ordinary due diligence period because they really want to make sure that works out for them.
Bisnow: When would a lawyer typically enter the picture?
Le: It depends on the dynamics of the transaction. Some clients bring us in at the term sheet stage: when they have a new deal and they’re crafting those terms at the offset. I'll look at the business terms and consider what things need to be discussed up front, whether it's permitted transfers, exit rights, liquidity or dispute resolution. These are not necessarily the things the clients are thinking of at the term sheet stage because they’re primarily focused on the economics of the deal. I like to at least have a conversation to go over these details in the very beginning.
Sometimes, we’re not brought in until after the term sheet is done. Clients want to get the deal underway. If they’re trying to move quickly, then it may make sense to wait on these conversations until we start putting pen to paper.
Bisnow: What does your role at Adler & Stachenfeld entail?
Le: I am the co-chair of our real estate department. There's a duality in the role: On the one hand, I focus on strategic development and administration of our core real estate practices, but also on the other, I focus on professional development of our attorneys.
I’m also very much a practicing lawyer, so I spend a lot of my time working with our lawyers on deals and thinking about how the market is evolving, and what our clients are going to need next. I have to make sure that Adler & Stachenfeld continues to deliver the level of service that our clients expect.
I don't want to lead the department from a distance. I want to be in the deals and understand what our clients are actually experiencing.
Bisnow: What do you think will be the hottest topics of conversation at Bisnow’s New York City State of the Market event?
Le: I think there will be a lot of discussions about where capital is actually moving in New York and what investors are willing to take the risk on in today's environment. Is it office assets? Residential conversion? Affordable housing? Hotels?
I think we will discuss the implications of the city's evolving policies on these opportunities. A lot of the conversation may also be how debt and equity are being combined to make these transactions happen.
Bisnow: What do you hope attendees will take away from your panel?
Le: I hope that they will walk away understanding that there is capital available out there for New York real estate. It's just a matter of structuring these deals in a way that makes each party in the capital stack comfortable enough to do the deals. For example, a lender, an institutional investor and a fund manager might look at an opportunity in New York very differently because there are inherent risks, tolerances and return requirements for each player in the capital stack. The audience will hear our panelists share their perspectives on this.
Click here to register for the Nov. 19 event.
This article was produced in collaboration between Adler & Stachenfeld and Studio B. Bisnow news staff was not involved in the production of this content.
Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.
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