Posted Sep 12, 2007 10:54 am CDT
Fearful lenders are behind a slowdown in the San Francisco real estate market that has extended to high-end commercial transactions and affected the lawyers who handle them.
Besides seeing an increasing number of failed real-estate deals, lawyers are finding that clients are seeking discounts of up to 15 percent if a deal stalls, the Recorder reports.
One big deal that fell through was a private equity fund’s planned $1.8 billion purchase of Mission West Properties, which owns commercial real estate in Silicon Valley.
There is a bright side, however. Clients whose deals fall through are sticking with their original lawyers as they seek ways to restructure their loans. Law firms are now working on an increasing number of such work-intensive workouts.
Erin Rothfuss, a real estate finance lawyer in Gibson Dunn & Crutcher’s San Francisco office, told the Recorder that work is still plentiful. “I’m just seeing more people scrambling for financing and more workouts coming our way.”
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