At a time of financial hardship and uncertainty throughout the industry, commercial real estate companies need a firm, guiding hand through the morass of legal possibilities. Leo Jacobs, founder of Jacobs P.C., is an expert in handling all manner of business problems, helping CRE companies re-establish themselves after unexpected legal challenges. We spoke to Jacobs about his firm and the current CRE economic landscape.

Q: What sort of law does Jacobs P.C. specialize in, and how does your firm help CRE companies that are dealing with economic difficulties during this especially challenging time?

Jacobs P.C. specializes in helping clients who are experiencing financial challenges make the best possible decisions toward solving them. This includes dealing with bankruptcies, defaults, restructurings, and all manner of complex situations. 

Given that commercial real estate is seeing a series of contractions, we’ve had to walk clients through a whole slew of issues that most have never had to deal with before. This includes business and bankruptcy workouts and litigation.

There are currently entire categories of companies facing debtor issues who have likely never faced them before, including landlords, tenants, shareholders, sponsors, developers, and guarantors and their businesses. Given all this, we spend a lot of time these days on restructurings.

Q: What is it about your specific expertise that makes your services so valuable to companies facing a tough economic path? 

Given our wealth of experience and in-depth knowledge of the issues I just described, we’re able to see the big picture in ways that many can’t, viewing them through a broad industry-encompassing context. 

When faced with potentially business-redefining challenges, companies need an educated fighter on their side, a law firm that is both deeply knowledgeable about current issues and their ramifications, and one that is aggressive enough to fight tooth and nail to secure the desired outcomes. We have more than proven our mettle in these areas via the only metric that matters — positive results for our clients.  

Q: Given current industry challenges, what are the most common mistakes you see companies making? 

Failing to stay informed on the best possible modern solutions to problems, and seizing on quick fixes that paper over issues temporarily instead of solving them at the root.

Many companies also fail to view the big picture of the industry at large. Evaluating your business in a silo is a terrible, counterproductive way to approach serious problems. 

From the law firm side, many firms fail to account for the seriousness of these issues, which require a deep well of knowledge and experience to properly solve. Firms should not expect junior attorneys to navigate their way through complex restructurings involving hundreds of millions or billions of dollars – that’s a surefire recipe for failing your clients. For matters of that sort, you need senior attorneys who understand the deep, complex ties between legal considerations and accounting and financial controls. 

Q: What advice would you give CRE companies regarding how to navigate today’s difficult economic terrain?

Stay fully informed of the goings-on in commercial real estate, and make your decisions with your full portfolio in mind.

Also, align with a firm with broad experience and the boldness to direct you toward proactive solutions that might fall beyond the realm of what you initially thought possible.  

Q: Given the state of the economy, what is the most important thing investors need to know about the state of lending right now?

The state of lending is dynamic, with interest rates, lending criteria, and risk appetites of lenders constantly shifting—that means an investor doesn’t need occasional updates, but daily updates on where the market is holding to gain a competitive edge. Today's lenders are operating under the assumption that the market is not on an upward trajectory. Consequently, when issues arise, persuading lenders to bear those risks in anticipation of a brighter future becomes an increasingly challenging proposition. Staying on top of daily lending interest rates and having connections that are in communication with lenders around the nation mean investors can stay on top of the market and strike while the iron is hot. 

Join Leo Jacobs at iGlobal Forum's 25th Real Estate Private Equity Summit on March 26th in NYC

The 2024 Real Estate Private Equity Summit is specifically designed to help industry leaders identify the best investment strategies and assets in the current climate. This targeted event gathers a highly-curated group of over 200 decision-makers at the most influential real estate investors, institutional investors, lenders, owners and developers for a full day of networking, idea-sharing and deal-making. 

Leo will be leading one of our Executive Exchange discussions, diving into creative financial structures for dealing with distressed assets and maximizing returns for investors.