Hunton & Williams has expanded its corporate and real estate practices in Washington with a lateral hire from a competitor.
Marvin Ehrlich, who previously practiced law at Greenberg Traurig, joins Hunton & Williams as a partner. Before Greenberg Traurig, Ehrlich worked at Locke Lorde. Ehrlich advises banks, insurance companies, and borrowers on the financing and development of commercial real estate.
In an exclusive interview with IFLR1000, Ehrlich described a Washington real estate market that is flourishing in spite of the current stance of the leading procurement agency, the General Services Administration (GSA).
“There are some lenders that are a bit squeamish because GSA has pulled back a little bit, but most of them, and especially foreign lenders, love having assets in D.C. It looks great on their brochures, and generally speaking, the region is doing very well, especially the seasoned assets and some of the newer developments,” Ehrlich commented.
In non-recourse lending, which comprises a bulk of Ehrlich’s work in the real estate space, the properties in question tend to be more seasoned. New developments typically receive funding from local banks with which there is already a relationship, and non-recourse lenders come in further down the line, when the new development has a track record.
“There are a lot of new developments in Maryland and Virginia, in the suburbs, but the clients I work with do mostly financing of seasoned assets. If you look at the economy, interest rates are still historically low, and there are a lot of loans that were made in 2005 to 2007 that are maturing, billions and billions of dollars,” Ehrlich said.
Moreover, Ehrlich sees a great deal of interest in investment by institutional money, and some institutions divesting themselves of assets.
“We’re seeing a lot of sale activity, a lot of refinancing activity. Even though underwriters are not as strict as the rating agencies would like, it’s still not where it was 2007. As interest rates get higher, proceeds get lower for fully leveraged properties. There’s always pressure for hedge funds to make more money, so they’re coming up with preferred equity products, mezzanine financing, things like that,” he added.
Ehrlich holds a J.D. from the Washington College of Law at American University and a B.A. from Rutgers, the State University of New Jersey-New Brunswick.