In the last heyday people got caught up in the big-firm scene and paid hundreds of thousands of dollars in legal on major deals. Now, there is a great appetite for the small firm, which has translated to our success and we’ve built a lot of deep relationships with our clients by giving them big-firm quality for less.

The hallmark of the firm is that we strive to be dealmakers. We grow deep relationships with our clients. We put them together for dealmaking sessions. When we can, we introduce them to off-market transactions or debt and equity investors. There truly is a void and we see that everyday in our business.

GlobeSt.com: What does the market look like from your end? Are deals starting to pick up?

Kaufman: We are absolutely seeing more deals happen. We even noticed a difference between August and September 2010. Everyone was waiting for the market to hit bottom. And the sense is that now is the time to start flowing back in.

That said, the deals everyone is chasing are the distressed assets--how do I get the big value play? But a lot of the deals are relationship based now. There are a lot of hospitality deals happening. Sophisticated operators are able to pick up one-off properties and help manage them. They also have access to better capital. It’s actually working. It’s not the Wild West anymore. It’s the guys who understand the real dirt business of real estate rather than those flips. And I don’t think the latter will come back for a long time.

GlobeSt.com: What about the bid-ask gap? Are we seeing some narrowing here?

Kaufman: Has there been a come to Jesus moment? I think we are close. Certainly, the spread has reduced. At the same time, you still have people who bought close to the top so they may not get what they’re looking for in a return. And some of these people are deciding to take a loss and just shed the property. People are starting to recognize that the reality is we’re not going to hit that place we were four or five years ago for a while. They need to retrench and figure out what the right play is.

The older real estate families are probably more realistic in terms of their market outlook. They’ve lived through these cycles. In the up times, a lot of them didn’t take that massive play but it was because they remembered what happened 15 years ago. A lot of them protected their downside in a very intelligent way. By managing that downside risk, maybe they gave up a few dollars but at the same time they didn’t lose everything. They are in a position now to make some value plays

GlobeSt.com: You mentioned hospitality trades, are there any other segments of the market that are active?

Kaufman: I’ve been shocked by the number of multifamily trades. I suppose some of the shakeout of the personal mortgage crisis is that there are more renters. I’ve also been surprised to see a lot of retail come across my desk--namely, smaller shopping centers. I don’t know how much of that is motivated by seller distress, but there has been an uptick. I’ve also seen an increase in the dollar amount of trades.

As I mentioned before, the hospitality sector is a phenomenal area for a very experienced operator. But you really need to be comfortable in that segment in order to make that play. It’s not for the average investor.

GlobeSt.com: Are tenants still ruling the day when it comes to signing new leases or are concessions starting to abate?

Kaufman: Tenants continue to take their newfound bargaining power out for a ride. There’s a lot of sublease space out there. You need a real jobs recovery to motivate the economy and real estate, to some degree, trails that. The New York City metro area is an exciting place and we’ve been seeing some modest rent growth. It isn’t back yet, but it’s starting to shore up.

Strauss: We’re seeing a lot of velocity on the sublease market in New York City. And we are seeing fierce competition for office space in New Jersey, driven largely by owners who are buying notes today at a much lower basis than in 2006. This has allowed them to lure tenants on a much more competitive basis. And you are certainly seeing tenants have their way due to that fierce competition.

GlobeSt.com: Are there any other trends we can look for in 2011 and what does your firm have planned?

Strauss: Investors are buying shopping centers all over the country in an effort to find those exceptional value-add opportunities. They will find a shopping center that is 50% vacant, put in some nice deals for the tenants and restore a sense of vibrancy.

With respect to money, we are representing one major institutional lender who is looking to spend millions of dollars right now. The CMBS market is also heating up. And there’s money coming in. People really want to make a deal in 2011.

David and I are really seeing our concept proven. We’ve put together a great team and we are well positioned for 2011 regardless of what happens to the market.

Kaufman: As Aaron said, our concept is being proven now. But having a lower price tag is not really the highlight of our firm. We are in fact less expensive, but, more importantly, we are able to be flexible in a way that a larger firm simply cannot.

I am in no way anti large firms--the training you get is spectacular and I wouldn’t be where I am without that experience. But it bears repeating that what we’re doing here is creating a new paradigm for real estate law. We are still going up against large firms on some deals, but we can leverage our flexibility rather than our size.