"We believe there will be many opportunities in distressed real state in the future, and Ropes & Gray definitely want to be a player in this market," Djaha tells GlobeSt.com. "And the fact that they're making this investment in the New York office demonstrate their commitment to real estate as a whole." He adds that the firm has done many New York-based deals, but has not had a real estate practices based here until now.
Djaha, whose 21-year law career overlaps with the last great real estate downturn of the late 1980s and early 1990s, says there's no doubt that the market will rebound sooner or later; it always does. "No one has a crystal ball as to exactly when that will occur," he says. "But if you're just looking at the market as it is this month or last month, you're going to miss out. You need to be a little more forward thinking and have the courage to say, 'there is a future of real estate and we want to be in it.' "
By comparison to other law firms, Djaha doesn't see his outlook, or that of Ropes & Gray, as all that different when it comes to the current market. "Like similarly situated partners at other firms, we are getting calls from clients with interest in doing real estate deals," he says. "It just so happens that the market dynamics aren't there right now. So where there's not the available deal for them today or not the available way to finance a deal today, it will happen."
He notes that the current downturn is differentiating itself from the early'90s trough by virtue of its duration and depth. However, Djaha says, "I'm hopeful that the view today is a little sounder than it was back then, in terms of figuring out the right approach to deal with this real estate. There are certain government initiatives that might be helpful; I'm not going to say they're helping right now. We've seen the markets opening up a little in terms of liquidity, and that might be one of the floodgates that's going to help."
On the subject of deluges, Djaha cites the impending flood of commercial loans coming due in the next few years. What effect this flood will have, and in particular how both borrowers and lenders will play it, is unknown at this point. "If there's no market to take these loans out, and there's no market to buy these properties, we're going to have a similar standstill."
Djaha comes to Ropes & Gray from Clifford Chance, where he was chairman of the Americas real estate practice. He focuses his practice on complex acquisitions and development transactions, asset-backed and mortgage-backed finance and related capital markets, real estate private equity and joint ventures, among other transactional work. His clients have included investment banks, lenders, real estate funds and developers and a variety of corporate clients in international, national and New York transactions.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
