Global law firm Proskauer has advised on eight significant real estate private equity and capital markets transactions over the past month in New York, exceeding $8.0 billion in aggregate value.
In an epic month of frenzied transaction volume in New York-centric deals, Proskauer represented American Realty Capital Trust IV in its acquisition of a net lease retail portfolio of properties from General Electric Co’s (GE) financial arm for $1.45 billion, and American Realty Capital Properties in a separate purchase of a net lease retail portfolio from GE for $807 million. The firm was also involved in American Realty Capital Properties, Inc.’s (NASDAQ: ARCP) definitive merger agreement to acquire CapLease, Inc. (NYSE: LSE) for $2.2 billion. Having advised Hines in the sale of two Midtown Manhattan office properties for over $1 billion, Proskauer also represented Ares Management in its pending acquisition of AREA Property Partners, and is currently working on a variety of significant transactions set to announce in the near term.
According to Ronald Sernau, co-Chair of Proskauer’s Real Estate Department: “The current activity level in this market is comparable to what we witnessed in 2006. We are very encouraged by recent interest which we believe demonstrates renewed confidence in the industry and confirms New York City real estate is an attractive investment that will retain and grow value in a range of economic environments.”
Peter Fass, a Partner and co-head of Proskauer’s Real Estate Capital Markets Group, added: “Real estate investment in recent months has been driven by a range of factors including the ability to use positive leverage because of historically low interest rates and increased private equity interest in the sector, particularly in hotels and single-family homes. We expect to see a flurry of activity as deals are pushed to close in anticipation of higher interest rates.”
“What we are seeing on the buy-side of these real estate trades are investors aggressively pricing deals with the view that next year the pricing of those trades may very well look attractive and therefore could not be replicated at current cap rates,” said Steven Lichtenfeld, a Partner and co-head of Proskauer’s Real Estate Finance and Real Estate Capital Markets Groups.
Outside of New York City, Proskauer recently represented an institutional investor in connection with the $1.3 billion recapitalization of a portfolio of approximately 160 hotels and the partial redemption of the institutional investor’s preferred equity interest in the portfolio. The firm is also representing CBRE Global Investors in its second big downtown San Jose, California purchase of the San Jose Marriott.
Jeffrey Horwitz, a Partner and head of Proskauer’s Private Equity Real Estate Group said: “Economic recovery and renewed confidence in real estate coupled with the large amount of foreign and institutional capital chasing real estate opportunities leads us to expect this activity to continue over the course of the year, not only in the New York market but across the country as well.”
Proskauer’s Real Estate Capital Markets Group is recognized as a pioneer in the use of innovative structures and techniques and creative approaches for executing highly complex transactions. The firm regularly counsels a premium roster of clients – including REITs, investment banks, real estate private equity funds, hedge funds, institutional and specialty lenders, sovereign wealth funds and pension advisers – across a broad spectrum of transactions, ranging from public debt and equity offerings and private placements, mergers and acquisitions and mortgage and mezzanine financings and restructurings, to joint ventures, distressed real estate and workouts and real estate dispute matters.
Proskauer’s Private Equity Real Estate Group handles complex and important assignments for a wide range of clients focused on real estate and real estate-related businesses and investments. The team comprises practitioners from Proskauer’s corporate, real estate, mergers & acquisitions, private equity, fund formation, capital markets, finance, litigation, tax, labor and environmental practices.
