Practical Solutions: Part 2

In the course of 30 years of practice as a real estate finance attorney, I have represented numerous lenders and borrowers of all types in commercial real estate transactions including Structured Finance, Joint Venture Equity, Life Insurance Permanent Financing, Construction Loans, Bridge Debt, Preferred Equity, Mezzanine Debt, and Non-Recourse Conduit Loans. This series is my way of sharing lessons and insights, gained from working on hundreds of deals, with the brokerage industry so that brokers can feel confident that the opportunities they work so hard to source will lead to successful closings. 

Lesson #2:  People and Personalities Matter.  

I get a number of referrals from both loan brokers and investment brokers. Most of the time we have an initial call about the deal, which invariably starts or ends with a request for “just a high level” review or perhaps a time sensitivity to getting a loan closed or a purchase agreement signed. Underlying these conversations is the anxiety we all feel about getting the deal done.

For lawyers that represent buyers and borrowers (and all of us do so from time to time), anxiety comes from the intersection of two competing problems: how well the initial drafts of documents balance the needs of both parties and the personalities of the people involved in the transaction. Most people focus only on the documents but it’s the personalities of the lawyers, the business people, and even the brokers that are far more important in terms of driving a transaction to a fast and successful conclusion for the client.

In my experience, the good brokers are the ones that find a great purchase opportunity or superior financing terms but the great brokers really stay involved in the deal until it closes. An active broker is a tremendous asset to the lawyer because of that direct link between that broker and the broker on the other side of the deal (or in some cases the direct relationship between the broker and the principal on the other side of the deal). When I am dealing with a difficult opposing counsel (more on that in Part 3, coming soon), it is the broker I most rely on to send the right message to the other side in a way that avoids the often biased presentation that would come from a lawyer to his or her client.

I’ve found that getting deals done is mostly about using common sense, creativity and people management skills and much less about actual lawyering skill. Finding that critical path toward a successful closing is the ultimate goal but that path is not always well marked.

Stay tuned for Part 3 of this “Practical Solutions” series, Great Bios Do Not Ensure Great Relationships!