Philip S. Lapatin
Title: Partner, Holland & Knight
Age: 64
Experience: 40 years
The mark of a seasoned expert is the ability to summarize a complex matter in a way that even a layperson can understand. Philip Lapatin does that and more – he makes it interesting. He practices in Holland & Knight’s Real Estate division, and acts as general counsel to the Greater Boston Real Estate Board, He regularly presents summaries of the most current real estate case law at conferences held by the Real Estate Bar Association (REBA). His presentation at REBA’s May 6 spring conference was simulcast to three packed rooms, and the audiences got good value for their seat time.
Q: How did you get your start?
A: It’s an interesting story. When I started with my first law firm I was supposed to be in a three-year rotation, and become exposed to all the different areas of the law. But the head of the real estate department decided he needed somebody in his group, and he had his secretary snatch me out of the waiting room the first day I showed up. In retrospect, it was good to [specialize] as early as I did. I very much like real estate. I enjoy working with clients with entrepreneurial inclination, and very much enjoy the negotiation that takes place before a deal can be made.
Q: What is your primary role in dealmaking?
A: My role in a transaction occurs after parties engage in what lawyers call a meeting of the minds, in which they’ve decided on what broad outline of the deal is going to be, price and other economic terms. My job, and I think the job of a lawyer generally, is to make sure the client is able to achieve whatever they expect to get, and to minimize what the barriers might be to the objective.
Q: Where is most of your commercial client base?
A: It has shifted; it was mostly in [Boston’s] Financial District five years ago. A lot of my clients who owned property in downtown Boston very wisely decided to sell it before the economy tanked. A number of additional clients decided to sell before the end of 2012, due to the uncertainty [over whether] the capital gains tax would increase dramatically. The focus of my practice has shifted toward the suburbs, where office parks are the focus of most of my leasing potential.
I also represent a developer of affordable residential housing who owns commercial space. The market for and the economics of affordable housing is very different from the conventional market. The big issue is where the funding comes from. These deals are written on a totally different basis. There’s a lot of involvement by government agencies at the federal and state levels, as well as local, especially in Boston. It takes a creative effort to put together the kind of financial package you need. The bigger the project, the more difficult that exercise is. It’s different from commercial deals, which are not at the mercy of an outside lender.
Q: How are the needs and expectations of suburban office park tenants different from those of downtown?
A: In the suburbs, the tenant is not only involved in office work but may also need R&D, industrial, warehouse. In one deal in the southern suburbs that I just finished, which took six months, the tenant wanted lab space including handling of hazardous materials. It was one of the most challenging enterprises I’ve ever been involved with.
Tenants are looking for all kinds of amenities, such as cafeteria and telecom infrastructure, that are attractive to employees. In Boston, one is selling location above all else, but outside [the demands are more diverse]. When the market is weak it takes longer to negotiate a lease. Brokers and attorneys sense that they might have a lot more leverage than they would otherwise.
Q: Tell us about the REBA presentations on case law.
A: The presentation that I give to REBA twice a year, focuses exclusively on case law, which are the decisions handed down by judges. It’s very different from what goes on in the state legislature.
In the courts in the last two or three years, the majority of decisions involved distressed residential real estate, in which a seemingly endless line of cases of borrowers who [often haven’t made mortgage payments for months or years and who] don’t have a leg to stand on are raising all kinds of arguments to stave off foreclosure. Many of their lenders are based outside of Massachusetts so most of these cases go to the U.S. Court of Appeals.
The attorneys representing borrowers throw everything but the kitchen sink at the lender. They accuse them of bad faith, they accuse them of unfair dealings, and some actually argue that lender has fiduciary obligation to borrower which is not true.
Eighty-five percent of these cases result in victory for lender but they bog down the court system and continue to hog the limelight. When the economy gets better these cases would go away.
None of this is to suggest that most lenders tend to be blameless but I do think that the most egregious offenders reached settlement agreements with the Attorney General and other public officials before their cases got to court.
Top 5 Favorite Buildings In Boston
- One Marina Park Drive (home of Strega on the Waterfront)
- Copley Place
- One Financial Center
- Park Plaza Building
- Prudential Center
