Since the end of the Great Recession, and the resulting global financial calamity that greatly impacted the US generally and commercial real estate specifically, banks have faced enormous governmental scrutiny, consolidation within their ranks, and increased capital requirements (together with added fiscal and monetary regulations) that have worked to effectively choke off traditional sources of debt as the main component in the capital stack of a real estate transaction. In other words, today’s deals largely can’t get done with bank debt alone.
To be sure, while banks and other institutional lenders remain a vibrant piece of the financing pie, market re-pricing has itself made bank “loan to value” or “loan to cost” ratios quite conservative when compared to the run-up pre-crash before 2008. The net result is that banks play a smaller role in the overall structure of a deal. At the same time, a nascent industry has been borne of ‘balance sheet syndicators’, comprised largely of sophisticated MBAs and ex-accountant or ex-lawyer types who have formed “real estate quasi-funds or clubs”, “capital allocation firms” as finance companies, all designed to assist in the syndication of investments (on behalf of themselves or sponsors). At this same time, family offices also arrived on the scene to play the part of the LP equity required to bridge the gap between the sponsor investment and the bank debt achievable. What’s more, with banks retracting and syndicators arising, family offices themselves were also looking for more autonomy and self-direction in their investments.
Similar gyrations have come upon law firms over the last decade, challenging the basic assumption of what a firm should be, and how it should relate to the client. Often this shakeup has required firms to consider their clients beyond the traditional hourly fee arrangement in exchange for legal services. That’s so for at least a couple of reasons, most notably the commodification of many legal tasks and because law firms, by their very nature, often sit at the deal intersection of accounting, financial advisors and the clients. Its why many astute observers have even noticed how many large firms are taking on complementary consulting practices in a given space.
Berger Singerman’s Family Office team sits uniquely at these crossroads. Launched in response to this new market paradigm, many of our attorneys come from either family offices, or syndication type backgrounds, or have significant contacts in representing family offices and helping them allocate capital. Our value proposition to clients is simple: we have access to deal flow and capital sources. Many times, this translates to assisting sponsor clients with introductions for capital in their projects or helping family offices deploy their capital in deal flow that sponsors have available.
Led by Chambers-ranked Marc Stephen Shuster and James L. Berger, our Family Office team represents a diverse range of single family and multi-family offices throughout the United States and abroad, Our clients, with deep and diverse portfolios, require a concierge approach to its legal representation. As such, our team’s advisory services run the gamut from assistance in navigating compliance of state and federal laws to managing complicated business transactions, protecting generational wealth and assets, formulating effective compensation and employment arrangements, and resolving disputes of all kinds.