Legal FEATURE
Legal Boom Rises
From Dust of
CRE Bust
Work in real estate law may be plentiful, though painful
for some attorneys’ more economically fragile clientele.
Forget about finding the bottom in real estate, it”s about to
be a boom of sorts in at least one sector.
Real estate attorneys could soon be awash in new
work—although it might not entail the type of transactional assignments that were so plentiful during the boom, and it’s work
that attorneys may take on with heavy hearts for their more economically fragile clientele.
Despite being hit hard by the downturn, with numerous layoffs
occurring at law firms across the US, real estate lawyers are ramping
up to deal with a plethora of legal drama that’s about to beset some
of their clients: loan workouts, keeping
By Don Jergler
foreclosing banks at bay, changing land
usage, helping landlords appease their
tenants and dealing with the myriad ins
and outs of the government bailout. And toping the legal to do list:
helping clients avert total failure.
“We haven’t quite gotten to the loan workouts,” says Tony Natsis,
a partner in Allen Matkins Leck Gamble Mallory & Natsis LLP and
chairman of the firm’s real estate practice. “But we’re going to have
a blitzkrieg in 2009 and 2010 and 2011.”
In the next few years, “when all that CMBS debt comes due, it
will cause a lot of stuff to be sold at wholesale, because nobody can
refinance this debt,” he adds.
And the options that are open for many are narrowing to either
do a short sale, or get foreclosed upon. “You’ve seen a lot of residential stuff,” Natsis says. “Residential is a leading indicator in and
out of most real estate downturns. It’s always the one that bombs
first and it’s always the one that come out first.”
He adds, “Now, we’re about to get the commercial effect.”
And the impact will be felt across all asset classes. However, Nas-tis notes, “we’re definitely going to have a lot of retail and a lot of
office. A lot of debt’s going to roll.”
To deal with the slew of action expected in real estate law, say
many legal experts, defendants and plaintiffs alike will need access
to more than just the traditional “dirt lawyer” who often serves as
the industry’s all-purpose counsel and go-to-guy.
“You need four brainwaves,” Natsis explains. “You need a cross-disciplinary approach.”
Beside the dirt lawyer to deal with entitlements, leases and the
like, Natsis says another “brainwave” must is a finance specialist. “A
