Practices

Real Estate Private Credit and High-Yield

Our multidisciplinary Real Estate Private Credit and High-Yield Team advises a wide range of debt and equity capital providers, sponsors, investors, managers/general partners, advisors, underwriters, servicers, and trustees. We advise across a range of debt and equity transactions and programs and capital and investment structures involving real estate and real estate related assets, investments, and interests, as well as secondary market transactions.

We advise on programmatic investing as well as highly bespoke transactions including construction, bridge and permanent first mortgage financings, mezzanine and senior/subordinate loan transactions, preferred equity and joint venture investments, warehouse/repo facilities, subscription facilities, limited partner investments, and bond and tax exempt transactions. We also advise on distressed matters including restructurings and rescue capital transactions, distressed debt analysis and purchase and sale, receivership and bankruptcy matters, and enforcement actions. Our tax and fund formation lawyers also advise on REMIC and REIT-related and fund formation matters.

With offices throughout the United States, including in key eastern and western locations, we have a deep understanding of private—and public—investment markets combined with an “on the ground” understanding of a range of local and regional real estate markets and their distinct local laws, political climate, and market characteristics.

Our interdisciplinary group combines that regional perspective with national finance, real estate, business, litigation, bankruptcy and workout, and tax experience to provide comprehensive, solution-oriented counseling. We also assist clients in identifying and pursuing potential opportunities as well as connecting with strategic partners and counterparties.

Experience

Representation of a private equity real estate investment fund formed by an affiliate of a national homebuilder and a global investment management firm for a $186 million acquisition and land development loan to a national development company. The loan financed the acquisition of a 759-acre land assemblage and provided funds to complete all necessary site work and lot improvements for the project, a 775-lot residential development in Loudoun County, Virginia. The lots were under contract for sale to three national homebuilders upon completion of improvement of the lots on a rolling quarterly takedown schedule. The representation included assisting in the structuring of the transaction and then drafting and negotiating all relevant loan documents. These included a highly structured completion guaranty and subordination agreements between our client and each of the national-homebuilder purchasers of the lots as well as an intercreditor agreement with the seller who provided seller financing secured by a portion of the project.

Representation of a private equity real estate investment fund formed by an affiliate of a national homebuilder and a global investment management firm for a $52 million refinance and land development loan. The loan refinanced an existing development loan and provided funds to complete all necessary site work and lot improvements for the project, a 540-lot residential development in suburban Philadelphia. The lots were under contract for sale to another national homebuilder upon completion. The representation included assisting in the structuring of the transaction and then drafting and negotiating all relevant loan documents. These included a highly structured completion guaranty and a subordination agreement between our client and the national-homebuilder purchaser of the lots.

Representation of a private mezzanine loan equity fund in the purchase of various mezzanine loans secured by 100 percent of the ownership interests in various entities owning and operating hotels and retail shopping centers.

Representation of a private mezzanine loan equity fund in restructuring of various mezzanine loans including intercreditor matters and structuring equity participations.

Representation in a cross-collateralized and cross-defaulted $112 million bridge loan financing transaction, secured by seven properties located in Texas, and subsequent transfer of the loans to the client’s repurchase facility line. The representation also included the documentation of a $3 million mezzanine loan, secured by a pledge of the membership interests in each of the mortgage loan borrowers.

The origination of a $37 million bridge loan to finance the purchase of a non-performing construction loan secured by a failed high-rise luxury condominium project in Berkeley, California. The financing was structured to allow the note-purchaser to subsequently obtain title to the property by foreclosure or deed-in-lieu of foreclosure, complete construction of the project, and convert the project to a luxury multifamily rental project.
Representation of a national finance company in the origination of a $78 million mortgage loan secured by a multifamily rental project in Long Island City, New York, structured with a senior A note and subordinate B note, with the client holding the subordinate B note. The representation included the drafting and negotiation of an A/B participation agreement and mortgage loan servicing agreement. The origination occurred mid construction and as a result, the transaction involved complicated structuring of the loan to protect the lenders under New York’s lien law.
Represented a private equity fund managed by a national real estate development company in acquiring and restructuring $370 million in senior and mezzanine loans secured by three luxury high-rise condominium projects in New York, including the structuring and negotiation of participation and management agreements with the existing developer/sponsor, negotiation of amendments to existing franchise agreements with two international luxury hotel/condominium brand franchisors, and the origination of $10 million in new construction financing to complete the projects.
Represent a joint venture of a real estate development company and a real estate investment company in the development of a 28-story mixed-use building (441,000 square feet) with 365 dwelling units and 14,500 square feet devoted to retail. We represented the developer in obtaining site control through a long-term ground lease with the University City Science Center, as well as negotiating an agreement with the Science Center concerning the overall development of the project. The project has successfully completed Philadelphia's new zoning process that requires community outreach and design review. The project enjoyed the support of the local Councilwoman and the Registered Community Organization as well as favorable review from the Planning Commission's Civic Design Review Committee. Elements of this project also earned the approval of the Zoning Board of Adjustment, the Philadelphia City Planning Commission, the Streets Department, and the Philadelphia Water Department.
Represented a joint venture, including a major real estate investor and manager, in connection with the acquisition, financing, and leasing of an approximately 675,000-square-foot industrial/warehouse building located in Lansdale, Pennsylvania.
Represented a commingled group investment trust composed of multiple pension plans in the development of a new luxury high-rise apartment project in Chicago. The total development value is more than $150 million. The transaction involved the coordination of multiple sources of capital for development and construction. Ballard Spahr handled construction law and accessibility law issues. The firm reviewed disclosures of pending accessibility claims against affiliates and the impact on this transaction, as well as indemnities related to compliance with design and construction requirements for accessibility for the disabled.
Represented a commingled group investment trust composed of multiple pension plans in an over $100 million investment in a joint venture with a national REIT. The joint venture was formed to acquire portfolio of retail centers across Southeast.
Served as lead counsel to a large east coast-based property owner and operator and its managed real estate investment fund in its acquisition of a 348-unit, Class A multifamily property located in Arlington, Virginia, and now known as The Point at Pentagon City, from an affiliate of the Carlyle Group.
Represented a joint venture of a large east coast-based property owner and operator and a real estate investment fund in the acquisition of a participation in debt securing a major multifamily mixed-use project in Washington, D.C. from a Cayman Island CDO trust. The acquisition was extremely complex as the debt was split into an A/B structure, and a portion of the debt was securitized. Among other things, we had to negotiate a complicated participation agreement with the collateral manager and trustee of a CDO trust.
Represented the joint venture between a biomedical realty company and a university in Philadelphia in connection with the development, financing, and leasing of a research building, including drafting and negotiating condominium documents, ground lease, tenant leases, and financing. This project consisted of a LEED certified research building with parking and an option to build a larger tower on an adjacent parcel. The project also included options to develop three other sites.
Represented a joint venture of a large university and a biomedical realty company in connection with the redevelopment of the former University City High School property at 36th and Filbert Streets. We worked on the zoning, remapping, and text amendments passed by the City Council required for the project. In addition, our lawyers have done the zoning work for lot line changes, signage, and water and runoff permits, as well as providing advice in use of public streets and sidewalks.
Represented a regional real estate investment and development firm in a variety of acquisition, disposition, redevelopment, financing, and leasing transactions involving a variety of project types including office, industrial, and quarry properties and having an aggregate transaction value in the hundreds of millions of dollars. This representation included multiple equity syndications involving the preparation of private placement memoranda, accredited investor questionnaires, and subscription agreements.
Represented the sponsor, in its roles as general partner and minority investor, in the recapitalization of a series of investment partnerships that owned a portfolio of suburban Philadelphia office buildings valued in excess of $200 million. The majority investor in the partnerships was a foreign investment fund in liquidation. The recapitalization involved the repayment of $175 million in maturing debt as to which the sponsor had provided a limited guaranty as well as the renegotiation of certain partnership/control rights and the structuring of a mechanism to monetize a portion of the sponsor's equity position.

Real Estate Private Credit and High-Yield

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