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Wednesday, Jul 24, 2024

Law Firms Build Up Real Estate Practices in Preparation for Healthy Market

Numerous San Diego law offices have either introduced or beefed up their real estate practice groups during the past few years.

The purpose of the growth strategy could be twofold: to meet the needs of clients and build a team ready for a recovering market.

Several local attorneys who have noticed the recent advancements in real estate law include veteran real estate lawyer Julie S. Mebane, partner with Duane Morris LLP’s San Diego office.

“Never before have there been so many law firms calling themselves real estate law firms,” said Mebane. “Some are new firms to town and others have been here awhile but have not featured a real estate group.”

Mebane, who focuses her practice on commercial real estate purchases, sales, loans and secured lending, and commercial and industrial leases, said the growth is partially due to firms not wanting to be left out of an industry that is a staple to the local economy such as tourism, the military and biotechnology.

“More firms are waving their real estate banner,” she said. “Everybody wants to get in on the action right now, but in a way, there is not quite as much action as there has been in the San Diego growth cycle.”

Mebane has represented developers, educational institutions, landlords, owners of real estate portfolios, public utility and power companies, residential buyers and sellers, single-property investors and tenants since 1981.

With the ups and downs of market conditions comes a new caseload and different needs of clients. Oftentimes, if transactional law needs are active then real estate litigation work is slow, and if residential real estate is slow then redevelopment is hot, she explained.

Mebane wonders whether firms have plenty of real estate work for their growing real estate practices, or if they are building their team for the upswing in the real estate market.

In addition, she said many still question , if you don’t have a real estate practice group, are you really viewed as a full-service firm?

“No one wants to be in San Diego and say they can’t do real estate law because they certainly don’t sound like a full-service firm if they don’t have a real estate practice,” Mebane said.

Real Estate Representation

One firm has grown significantly in the past seven years and has more then enough to do.

Gordon & Rees LLP established a firmwide real estate practice group in 2000 out of its San Diego office. The office now consists of eight attorneys and represents 75 percent of downtown’s Class A office buildings, including One America Plaza, Symphony Towers, Koll Center and Wells Fargo Plaza.

Its team also represents some of the largest commercial property owners, managers and developers in the county, including San Diego-based Burnham Real Estate, CB Richard Ellis, Crescent Real Estate, La Jolla-based C.W. Clark Inc., the Irvine Co., San Diego-based St. Croix Capital Corp. and Sudberry Properties Inc.

Brian Frasch, partner and head of Gordon & Rees’ real estate practice group, said the firm is now one of the largest real estate litigation practice groups in the county and on the way to becoming the largest transactional practice group.

Frasch does not see significant growth in the number of real estate practice groups or growth within the practice groups in San Diego.

Outside of his own firm, which started just seven years ago, he said there are only a few firms in town that have more than one or two real estate attorneys.

“Luce Forward (Hamilton & Scripps LLP) has an excellent real estate department, Seltzer Caplan (McMahon Vitek) has been doing real estate forever in this town, Allen Matkins (Leck Gamble & Mallory LLP) has a great deal of real estate expertise, and then other firms have maybe one or two lawyers that excel in that area,” Frasch said.

Because real estate is a large component of the local economy, local attorneys have kept very busy, according to Frasch.

Gordon & Rees is now seeking opportunities to expand the firm’s practice group.

The firm plans to bring in at least one more attorney in the transactional side and one or two in the litigation side of real estate law in the next year.

Frasch said Gordon & Rees sets rates that give it a competitive advantage in the regional and national markets.

“At the same time, with the team we have assembled here, we are able to deliver the absolute highest level of service and go head to head, toe to toe, with any other firm in town, again, often at a fraction of the cost,” said Frasch, who served for many years as the director and general counsel of the San Diego chapter of the Building Owners and Managers Association.

Responding To Changes

Sandra J. Brower, a shareholder with San Diego-based Wertz McDade Wallace Moot & Brower APC, said shifts in real estate practice groups are constant and the ever-changing real estate market affects nearly everyone.

“There is always a certain amount of shifting going on,” Brower said. “So it is hard to say that what is going on right now is out of the ordinary.”

She said there is still plenty of work out there for real estate lawyers.

“You have to remain flexible and you have to have a pretty broad-based real estate practice to serve all the needs of the real estate market,” Brower said.

She added that the emphasis shifts to where the work flows. Brower has spent much time as a mediator in eminent domain and related real estate matters. She also sees a greater need for expertise in environmental and green real estate.

Brower has practiced land use, litigation and real estate law for 29 years. Her clients include home builder D.R. Horton Inc., the San Diego Unified School District, Western Pacific Housing Inc. and several San Diego-based developers.

Wertz McDade clients include The Corky McMillin Cos. commercial division, Douglas Allred Co. and the Rancho Santa Fe School District.


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