At Bilzin Sumberg, most Miami real estate deals continuing despite coronavirus
Measures to contain the spread of COVID-19 are shifting by the day — and so are responses by investors, companies and buyers. To track the impact in real-time, RE|source Miami is asking real estate professionals in various sectors to give us a report on what they are seeing.
Leading off is Al Dotson Jr., managing principal at the Miami-based lawfirm of Bilzin Sumberg, where real estate is a key practice area.
Q: How has the last week played out at your firm and within your clients’ companies? Is it a temporary wait-and-see, or is it a hard stop? What’s the thinking?
The world has been thrust into a period of uncertainty without any current assurance of how long it might last, so for some it’s very much a wait-and-see situation. Even amidst the uncertainty, it is important to be proactive based on the information available when a decision is made. Uncertainty notwithstanding, South Florida has proven itself resilient time and again, and I have no doubt we will emerge from this health crisis stronger than before.
At Bilzin Sumberg, our role as an advisor to our clients takes on added significance during a crisis. We are addressing our clients’ ongoing business needs with a keen focus on the safety of our workforce. The way our team operates and counsels clients is going to be different for the foreseeable future, and those dynamics are changing day by day, even hour by hour.
Our attorneys have spent the past two weeks working with clients to address all pending transactions and update contracts and agreements as needed. We developed a task force to consider near-term and long-term issues and opportunities that our clients may not have considered so that we are prepared to advise them. Our Practice Group Leaders and their teams were directed to keep in continuous communication with clients and to develop customized strategies that account for this fast-changing situation.
Several weeks ago, we began testing our infrastructure, training all our people to use our remote working technology, and modifying our travel, visitor and meetings policies. We hired a sanitizing crew to disinfect our office on Brickell Avenue as a precautionary measure. Our firm infrastructure is now fully accessible to our entire workforce from outside the office.
While we are typically proponents of meeting in-person with clients, we are encouraging attorneys to utilize phone and videoconferencing, as well as electronic document signing and sharing.
Q: What impacts have you seen in terms of deal flow? Are deals continuing to close, or have they been put on hold?
Bilzin Sumberg’s real estate practice is one of the largest and most active in Florida, so our attorneys are involved in deals across all asset classes and in all corners of the state.
The greatest short-term impact so far has been within the hospitality space, due to growing uncertainty within the travel and tourism sector. Financing for most hotel deals has come to a temporary halt.
The hospitality market aside, we are seeing active deal flow in other market segments as opportunistic investors are looking for ways to deploy capital. Likewise, our work structuring public-private partnerships across Florida is moving forward as planned, which reflects the fact that our infrastructure needs are so significant.
For over two decades, Bilzin Sumberg has had a robust restructuring practice, and our attorneys within that practice are busy restructuring existing loans and business deals on behalf of clients that are taking proactive steps to ensure financial viability and sustainability.
Q: What effect has the downturn in the stock market had on your thinking and your clients’ thinking?
From my vantage point, the current economic climate bears more resemblance to the economic shock we experienced after the September 11th attacks, as opposed to the Great Recession of 2008. We are facing an event-driven slowdown, versus a structural slowdown.
The fact remains that the U.S. entered this crisis in a solid position because the underlying fundamentals of our domestic economy are strong: people are employed, inflation has stabilized, and falling gas prices means consumers have some degree of discretionary spending for the time being. The sooner we emerge from this public health crisis, the sooner we can get back to growing our economy.
This is the same context that attorneys in our Global Tax & Wealth practice are using to counsel businesses and high net worth families and individuals, both within the U.S. and overseas, all of which are contending with this period of heightened market volatility.
Q: What do you expect to be the greatest business and economic challenge in the coming weeks?
The notion that U.S. consumer spending could freeze up due to health concerns combined with economic fears is somewhat unprecedented. Even during the 2008 recession, consumer spending slowed considerably, but never came to a full stop.
The idea that Americans might be confined to their homes for weeks on end represents a new threat to our country’s economy. I find reassurance in the fact that our nation thrives on ingenuity. I am certain that businesses will find new ways to survive and thrive as this crisis unfolds.
Q: What do you think will be the greatest opportunities in the next few months?
Being a mid-sized law firm with approximately 100 attorneys, the ability to communicate with one other and with our clients is easier than what you might see at a large global firm, where people are spread out working from offices in different places and may not even know each other. Our model, both in terms of our size and our sharp focus on the sectors driving Florida, means we can stay nimble — always anticipating and reacting to what’s happening in the world and within our state.
This has been one of our competitive advantages at Bilzin Sumberg for years, and it is a key ingredient to our steady growth over time. We have weathered multiple economic cycles over our 20-plus year history, and we’ve come to view crises as opportunities to get creative in developing client solutions while delivering a high level of service at a time when it is needed most. Now is the time for our attorneys to show their value — every hour of every day.
