In the fast-growing, highly lucrative arena of real estate investment trusts, competition among law firms for established REIT practices is cutthroat — and turnabout is fair play.
Six weeks after its REIT practice was decimated by the departure of a 10-lawyer team from its Raleigh office, Alston & Bird early this month attempted to raid seven REIT practitioners from Morris, Manning & Martin. The firm netted Rosemarie A. Thurston to lead its real estate securities practice, and associate Hugh S. O’Beirne.
The intervening action may require a scorecard to figure out.
Alston initially picked up two new REIT partners, Thurston and Lauren B. Prevost, and two of their five associates, O’Beirne and James H. Sinnott. Morris Manning then won Prevost back over the weekend, potentially preventing the loss of the rest of the team. And after a week at Alston, Sinnott accepted a third offer, to be of counsel at the local office of Lord, Bissell & Brook.
“In any red-hot practice area this kind of thing happens. We just haven’t seen too many red-hot practice areas in the last few years,” said Sinnott, who spent the week of June 3-10 hopping from firm to firm to firm.
“It was a fun week in a very, very stressful Tums-related sort of way,” he added.
REITs — and the lawyers who understand them — are hot commodities because investors who are unsure of the stock market want to put their money in harder assets such as real estate, said Thurston. “Real estate is a nice, tangible asset — as opposed to technology — and a REIT is a way to securitize that asset,” she explained. The return on real estate securities has far outpaced the stock market in the last several years, Thurston said, and REITs also provide investors tax advantages and a steady annual payout because the trusts must disburse a percentage of any income.
Alston’s REIT wrangling started in April, when the head of the firm’s REIT practice, Brad S. Markoff, decamped with nine other lawyers to open the Raleigh office of DLA Piper Rudnick Gray Cary. Markoff said then that his new firm, with 200 real estate lawyers in the United States and another 250 around the world, offered him a bigger platform.
Then on the morning of Friday, June 3, Thurston and Prevost, two key partners in Morris Manning’s real estate capital markets group, resigned to go to Alston. In the afternoon, they sought to take the rest of their team with them, and Alston made offers to each member.