Texas Real Estate Business magazine covers the multifamily, retail, office, healthcare, industrial and hospitality sectors in Texas.
Issue link: https://texasrealestatebusiness.epubxp.com/i/817755
52 • May 2017 • Texas Real Estate Business www.REBusinessOnline.com below, combine substantial experi- ence, range and responsiveness, as well as specialized commercial real es- tate industry and market knowledge, to match value with variety and vice versa. "So many clients now require diver- sity among their legal teams," Henry says. "The demand for highly quali- fied, experienced, diverse attorneys has skyrocketed, and the ability to re- tain them has grown more difficult." Munsch Hardt Kopf & Harr While many parts of the country of- fer substantial commercial real estate opportunity, Texas touts an especially powerful combination of zero state income tax, relatively relaxed regula- tions, numerous financial incentives and a quality workforce. Companies such as Amazon, Toyota, State Farm Insurance and Liberty Mutual have certainly noticed, putting down roots in the country's fourth-largest metro, Dallas-Fort Worth. In particular, ma- jor firms have targeted the Plano-Leg- acy area and near Frisco's "$5 Billion Mile," the area anchored by the Cow- boys' new Star development. "Whereas some northeastern cities are running out of developable land in the urban core and the immediate periphery, there re- main large swaths of vacant land in the Dallas-Fort Worth metroplex, includ- ing south of down- town Dallas and between Dallas and Fort Worth," says Cate Afrooz, an as- sociate at Munsch Hardt, which has offices in Dallas, Houston and Aus- tin and a separate corporate finance group representing real estate lenders. The 32-year-old law firm is seeing the biggest increases in demand for le- gal services in the e-commerce-fueled industrial and Millennial-powered multifamily sectors, as well as in pub- lic-private partnership deals. Also, the growing healthcare needs of the Baby Boomer population have boosted its medical practice through the devel- opment of freestanding emergency rooms, clinics and other patient-care facilities. "We're currently helping several clients navigate public-private part- nership programs and incentives in- cluding Tax Increment Reinvestment Zones, 380 [economic development] agreements, the PACE (Property As- sessed Clean Energy) program, state and historic tax credits, low-income housing tax credits and New Markets Tax credits," says Afrooz. Commercial real estate clients have always needed knowledgeable, thorough, responsive attorneys, but what's changed is the "unprecedent- ed level of responsiveness" people demand in this high-tech, 24/7 world, Henry asserts. However, clients don't exactly welcome the invoices that come with the increased availability and accessibility of commercial real estate lawyers, which has led firms to create alternative fee structures. "Moreover, while clients have al- ways appreciated specific attorneys who were willing and able to advise on more than just 'legal issues' in a document, today's clients expect their attorneys to have a thorough under- standing of the business goals and strategies fueling any particular deal," says Henry, who believes that law- yers must broaden their knowledge from the learning of legal treatises to the commercial real estate news and trends found in daily, industry-related publications and business periodicals. "We believe our unique niche lies in the level of active participation and leadership of our lawyers in many real estate trade organizations and industry groups throughout our area and the nation." Baker Botts LLP The speed of business is always in- creasing due to the advance of tech- nology. In commercial real estate, rapid tech innovations have real ef- fects on projects and property — see the evolution of e-commerce — but that's not all. Macroeconomic fac- tors, demographic shifts and regula- tory developments combine to make change the only constant in the com- mercial real estate world. This blur-or- blend-or-both pattern manifests itself in the increasing sophistication and complexity of real estate deals, espe- cially in fast-paced, pro-business Texas. "These compli- cated arrangements have become a much larger focus over the years for those of us who started off in this industry think- ing of ourselves as pure 'dirt lawyers,'" says Jeremy Gott, partner at Dallas- based Baker Botts LLP. Real estate attorneys are tasked with ensuring their client's vision is rock- solid in its due diligence and other de- tails before it can be rock-solid coming out of the ground. On any given day, Gott and his colleagues might offer counsel on multi-tiered investment structures with parties ranging from institutional investors to high net- worth individual investors and local landowners. The next day, the focus could be international joint ventures covering multiple product types. More moving parts in commercial real estate, including a global sweep of investors, mean more risk. With tech- nology, it truly is a small world after all, but the challenges of deals and de- velopments keep getting bigger. Real estate sponsors and investors require expert transactional guidance and ad- ditional legal resources, such as tax, restructuring, environmental, ERISA, regulatory and litigation attorneys. "Real estate con- tinues to draw insti- tutional and sover- eign investors from around the world into major markets and increasingly into certain second- ary markets," says Baker Botts Partner Kimberly Schlanger. "Participants need experienced advi- sors to help them navigate the uncertainty and com- plexity of conducting transactions in today's global economy. We work with our clients to develop creative structures to accomplish successful transactions and investments that meet their business objectives in the face of ever more rapid change in the tax, business and investment climate." Despite the complexities of CRE deals, the expectation still seems to be faster, better, cheaper. Schlanger says her team of real estate lawyers is often expected to complete deals that used to take six months to a year in one to two months. A law firm with a global perspective that brings a range of ex- pertise, including structuring, tax, en- vironmental and pension fund issues, serves the client's big goals while mastering the small details. That usu- ally results in long-term relationships, which means more confidence and ef- ficiency on the deal-making front lines of real estate. Gott says Baker Botts's balanced, multidisciplinary approach to com- mercial real estate boosts client service while keeping costs down: "I think our firm's real estate practice stands out by providing smaller teams of at- torneys with broad knowledge bases stretching from work traditionally handled by real estate lawyers — leas- ing, development, acquisitions and dispositions — to financings, joint ventures and fund formation that are often handled by lawyers in separate groups at other firms." Winstead PC Everything is bigger in Texas, in- cluding the competition. The more people flock to the pro-business state and its high-growth markets, the more developers, investors and, consequently, attorneys will vie for a piece of the business pie. "By far, the big- gest challenge for law firms is the rapid expansion of competing firms," says Greg Erwin, co-chair of Winstead PC's Real Estate Development & In- vestments Practice Group. "Out-of- state law firms are paying exorbitant salaries and poach- ing established lawyers and firms to gain a foothold in a highly desirable market. The only way to combat this is to set yourself apart with service, focused niche practices and relation- ships." Winstead's Real Estate Develop- ment & Investments Practice Group covers the core CRE competencies of acquisitions, dispositions, leasing and financing, but has also developed strong specialty practices in healthcare real estate, sports business/public venues and mixed-use/condominium projects, including master-planned community governance. Continued areas of commercial real estate indus- try growth for the 325-plus-attorney firm also include tenant-specific office projects, including corporate reloca- tions, and hotel/hospitality projects. "Winstead was founded on its real estate practice," says Co-chair Greg Zim- merman. "Adding immense strength to our reputation and success has been the considered and deliberate de- velopment of niche practices within that spectrum." Winstead's com- mitment to serving the healthcare industry more than 10 years ago was a timely one as demographic, regula- tory and delivery drivers continue to fuel the sector. "Healthcare-related developments are increasing as a result of our aging population and changes in the de- livery methods of healthcare, which range from off-campus moves and community-based facilities to stand- alone emergency, surgery and primary care centers," says Erwin. "Changes in regulations and reimbursements also spark growth in this industry niche." Stout demand means new market challenges, which translate to more LAW FIRMS REACT TO REAL ESTATE GROWTH LEGAL from page 1 Greg Erwin Winstead PC Cate Afrooz Munsch Hardt Kopf & Harr Kimberly Schlanger Baker Botts LLP Greg Zimmerman Winstead PC Kitty Henry Munsch Hardt Kopf & Harr Jeremy Gott Baker Botts LLP