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Case Studies
Completing the Largest Retail Portfolio Sale in Massachusetts History |
Challenge
Dividend Capital Total Realty Trust Inc., a Denver-based diversified REIT, sought to buy 25 supermarket-anchored retail properties in the Greater Boston area from Tedeschi Realty Corp., a Rockland, Mass.-based real estate development and property management firm. With nearly two million square feet of space and a total purchase price of $377 million, the retail portfolio would be the largest ever sold in Massachusetts.
Dividend Capital needed a law firm partner with the depth, experience and breadth to handle a deal of this magnitude. They needed real estate counsel in negotiating the purchase agreement and the financing for acquisition. They needed a legal team robust enough to complete due diligence on the transaction in relatively short order. They also needed counsel with the appropriate expertise to handle any environmental questions that might arise during the investigation of the large, diverse group of properties.
The deal was set to take place in the summer and fall of 2007. Issues with the financial markets at that time added a level of intensity to the process. The legal partner would have to work thoroughly, but very quickly as well.
Solution
Brownstein Hyatt Farber Schreck tackled the transaction with a team-based approach. Bringing together Shareholders from a variety of disciplines, the firm assembled a team of 10 attorneys and 5 paralegals from the Real Estate Finance, Land Use and Tax groups. The team worked together tirelessly to accomplish the acquisition within the scheduled timeframe. They completed due diligence, negotiation of the purchase agreement and negotiation of the financing in less than four months. Brownstein’s land use and environmental attorneys worked through a variety of issues to the satisfaction of both Dividend Capital and its lender, allowing the deal to continue as planned.
Ultimately, Brownstein attorneys helped arrange an initial purchase of 22 properties for $329 million, and then a secondary purchase of the three remaining properties for $48 million. The completion of the deal allowed Dividend Capital to employ a significant amount of its equity commitments in two large transactions, rather than going through a tedious and time-consuming process of 25 separate transactions. With the REIT buoyed by the new portfolio of shopping centers, Dividend Capital Total Realty Trust is poised to provide strong returns for its investors in the coming years.
Of course, Brownstein didn’t just close the deal and walk away. In keeping with its strategic partner model of client service, the firm is involved with various financing, leasing and property management issues on an ongoing basis. |
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