Real Estate Slowdown and Strategic Counsel
Insights from Phil Rosen at Shutts & Bowen
At the Real Deal forum in South Florida, Leo Jacobs sat down with Phil Rosen, Partner at Shutts & Bowen LLP, to discuss the current state of the real estate market and the critical role of strategic counsel in navigating challenging times. The conversation shed light on the market's slow transaction pace for large multifamily assets and the increasing patience of banks with distressed borrowers.
You can watch the full interview below to gain further insight:
A Slower Pace, but Less Distress
Despite media narratives suggesting widespread distress in the real estate market, Rosen emphasized that this is not as pervasive as reported. "Things are happening, but they’re happening slowly," he explained. Banks are demonstrating notable patience, often allowing borrowers to extend deadlines by six to twelve months, a level of leniency that has exceeded expectations.
Transactional Counsel as a Problem Solver
The discussion delved into the importance of effective transactional counsel in protecting real estate investments. Jacobs, speaking from his experience in bankruptcy and litigation, highlighted the pitfalls of inadequate counsel. Rosen agreed, noting that the details in forbearance agreements are critical to safeguarding a client’s future. His team at Shutts & Bowen takes a proactive approach, fostering partnerships with lenders and focusing on problem-solving rather than placing blame.
"Forbearance agreements are about thinking two steps ahead," Rosen explained. "We insert provisions that might allow lenders to bring in new capital or facilitate a loan buyout, ensuring the client’s bottom line remains protected."
Balancing Collaboration and Assertiveness
Both speakers underscored the importance of collaboration in negotiations while maintaining enough leverage to stand firm. As Jacobs put it, “Engaging with the lender is essential, but you also have to be ‘dangerous’ enough to show you’re capable of standing your ground.” Rosen agreed, highlighting the delicate balance required in these negotiations. "If you owe the bank a little money, it’s your problem. But if you owe the bank a lot of money, it’s the bank’s problem," he quipped.
Final Thoughts
The conversation between Jacobs and Rosen showcased the evolving dynamics of the real estate market and the strategic thinking required to navigate it successfully. As transactions for large multifamily assets slow and banks exercise patience, the role of experienced counsel becomes even more vital.
PODCAST - Confronting the Impossible with Leo Jacobs.
Leo Jacobs, Founder and CEO of Jacobs PC
Known for finding creative, expedient solutions to complex and high-profile cases, Leo excels in matters including distressed investment and asset management, real estate law, corporate law, dispute resolution, business divorces, negotiation, and more. Leo’s extensive expertise in debt and equity structures enables him to employ a full spectrum of legal tools to achieve swift, optimal results for clients. His practice, Jacobs P.C., bridges commercial litigation, corporate transactions, and financial rehabilitation, handling cases across federal, state, and bankruptcy courts, as well as administrative tribunals.
