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The real estate finance market has undergone significant change in recent years, with increased regulation, the entrance of more categories of lenders and changes to documentation. At CMS, we understand the challenges that these changes pose for you, having acted for commercial clients, including lenders, developers, borrowers, sponsors and hedge counterparties on a wide range of investment and development transactions.

We helped to create the industry standard documentation on which most deals are based, and have helped commercial clients like you fund assets such as commercial and residential real estate, ground rent investments, hotels, healthcare assets, theatres, logistics portfolios, shopping centres, house building and supermarket developments.

They are very easy to work with, proactive and personable. We have excellent communications with them and they help matters go smoothly.
Chambers UK, 2016

As an international law firm with cross-border transactional experience, our cohesive international team is able to deliver complex trans-European property portfolio financings.

We act for commercial clients including funds, property companies, family offices, universities and UK and international banks and financial institutions, and we are experienced in acting for both senior and mezzanine lenders.

High­lights of our ex­per­i­ence in Real Es­tate Fin­ance in the UK
Lenders Aareal Bank AG on the fin­an­cing of the cor­por­ate ac­quis­i­tion by SGRF and a privately held hos­pit­al­ity group of a  port­fo­lio of ho­tels across Ger­many, France, Spain, Lux­em­bourg and Switzer­land. Deutsche...
Law-Now: Real Es­tate Fin­ance
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A tech-driv­en trans­form­a­tion
The in­creas­ing im­port­ance of tech­no­logy and di­git­al­isa­tion has come to the fore through­out the COV­ID-19 pan­dem­ic, par­tic­u­larly in the of­fice mar­ket but also in life sci­ences, build to rent and lo­gist­ics.
Where tech ad­op­tion and COV­ID col­lide
We asked the real es­tate sec­tor of­fice oc­cu­pi­ers, renters, re­tail­ers and life sci­ences busi­nesses what im­pact COV­ID-19 is hav­ing on de­mand for real es­tate in their area, and also on ad­op­tion of in­nov­at­ive tech­no­logy.The sweet spot for in­nov­a­tion and de­mand driv­en by COV­ID-19 is life sci­ences, where both the oc­cu­pi­ers and the real es­tate pro­fes­sion­als see equally pos­it­ive op­por­tun­it­ies. Driv­en by spec­tac­u­lar tech­no­lo­gic­al break­throughs like COV­ID vac­cine de­vel­op­ment, and with pub­lic and private sec­tor fund­ing pour­ing in­to the sec­tor, life sci­ences is an as­set class in the up­per right quad­rant, very much em­bra­cing the op­por­tun­ity.By con­trast, in-store re­tail is `stuck in the head­lights’ ac­cord­ing to our polling – be­set by fall­ing de­mand caused by lock­downs and less likely to have ad­op­ted in­nov­at­ive tech­no­logy as a res­ult of COV­ID. In­ter­est­ingly, real es­tate pro­fes­sion­als are sig­ni­fic­antly more pess­im­ist­ic about real es­tate de­mand from the sec­tor, than re­tail­ers them­selves. This may be a re­flec­tion of in­creased de­mand for lo­gist­ics space as a res­ult of the ac­cel­er­ated shift to on­line shop­ping.While real es­tate pro­fes­sion­als see of­fices as the most act­ively in­nov­at­ing in re­sponse to the pan­dem­ic, oc­cu­pi­ers are less con­vinced, al­though they also seem less pess­im­ist­ic about de­mand for of­fice space. This per­haps re­flects the real­ity of a blen­ded work­ing ap­proach which looks here to stay in the im­me­di­ate fu­ture.The build to rent sec­tor, by con­trast, is seen as `lucky’ by renters who see that de­mand is strong but do not be­lieve they are see­ing enough in­nov­a­tion in the light of COV­ID-19 rather than re­devel­op­ing tired prop­er­ties.
Pan­dem­ic spurs ac­cel­er­ated trans­form­a­tion
Many people have spec­u­lated over how quickly COV­ID-19 has ac­cel­er­ated tech­no­lo­gic­al ad­op­tion with­in real es­tate – but now we have a view from more than 4,000 in­dustry pro­fes­sion­als, of­fice oc­cu­pi­ers, renters, re­tail ex­perts and life sci­ences pro­fes­sion­als: five years.Across all groups this is the most com­mon pre­dic­tion al­though the mean re­sponse is four years. The im­pact of lock­downs and the need to rap­idly em­brace tech­no­logy is ex­traordin­ary: how many people used Teams or Zoom for busi­ness 18 months ago?
Ro­bot world and the roar­ing 20s
Ar­ti­fi­cial in­tel­li­gence (AI) and ma­chine learn­ing, 5G IoT, vir­tu­al/aug­men­ted real­ity and ro­bot­ics are con­sidered the com­ing forces among real es­tate cus­tom­ers, which be­gins to ex­plain how tech­no­logy is ex­pec­ted to ac­cel­er­ate change in the sec­tor dur­ing the 2020s.These are pro­found changes which will not only im­pact how key in­dus­tries are man­aged but also how they oc­cupy real es­tate – and who oc­cu­pies real es­tate on their be­half. In­ter­est­ingly no one tech­no­logy scores over 50%, sug­gest­ing views are di­vided on which in­nov­a­tions will have the most im­pact on the real es­tate over­all.Tools such as Amazon’s Al­exa have re­moved the mys­tique from AI as people have real­ised that it can make their lives easi­er, and it is per­haps not sur­pris­ing to note that the highest ac­cept­ance of this tech­no­logy is in ar­gu­ably the most tech-ad­vanced sec­tor – life sci­ences.
Real Es­tate Re­bound
After the seis­mic shifts and re-eval­u­ations faced by us all in real es­tate over the last 18 months, our latest an­nu­al re­search makes it clear that, for both the sec­tor and its cli­ents, vac­cine-led con­fid­ence and op­tim­ism are sup­por­ted by two ad­di­tion­al forces shap­ing our fu­ture: tech­no­logy and ESG.
In­ter­view: Paul Bashir, Har­ris­on Street
Please tell us about Har­ris­on Street Har­ris­on Street is a lead­ing in­vest­ment man­age­ment firm ex­clus­ively fo­cused on al­tern­at­ive real as­sets. Since its cre­ation in 2005, the firm has spe­cial­ised in seni­or hous­ing, stu­dent hous­ing, health­care, life sci­ences, stor­age real es­tate and so­cial and util­ity in­fra­struc­ture. We have in­ves­ted USD 41bn across these sec­tors across North Amer­ica and Europe. What is your role at Har­ris­on Street? I lead our European op­er­a­tions as well as sit­ting on boards for Har­ris­on Street’s European funds re­spons­ible for the ex­pan­sion of Har­ris­on Street’s European strategies. We be­lieve strongly in the al­tern­at­ive real as­set sec­tors in Europe, and their tre­mend­ous growth po­ten­tial. What is your per­cep­tion of tech­no­logy in real es­tate?  Five years ago, in a well- at­ten­ded European con­fer­ence, I was one of few seni­or ex­ec­ut­ives present who iden­ti­fied tech­no­logy as one of the biggest threats and op­por­tun­it­ies to our in­dustry. Five years on, the real es­tate in­dustry still lags be­hind oth­er sec­tors, but it has caught up massively in re­cent years – helped by forced ad­op­tion through the re­cent pan­dem­ic. Tech­no­logy and the cor­rect im­ple­ment­a­tion there­of is one of the most im­port­ant suc­cess factors of our gen­er­a­tion of real es­tate lead­ers. What has changed in the last 18 months?  At the be­gin­ning of 2020 the real es­tate in­dustry was broadly speak­ing 10 years be­hind where it needed to be. It has caught up massively – but is still three to five years be­hind where it needs to be, in my opin­ion. Al­tern­at­ive real as­sets are driv­en by demo­graph­ic trends, which in turn are fuelled by rap­idly evolving con­sumer trends. The pan­dem­ic has ac­cel­er­ated the rate of ad­op­tion of tech­no­logy by both con­sumers and busi­nesses and has in a re­l­at­ively short peri­od of time ac­cel­er­ated the rate of pr­op­tech ad­op­tion. No sec­tor ex­em­pli­fies this in­creased rate of ad­op­tion more than build to rent, where tech­no­logy has lub­ric­ated the whole ex­per­i­ence dur­ing COV­ID. Dur­ing lock­down, people have needed to in­ter­act more with their build­ings and loc­al en­vir­on­ment. Tech­no­logy has hugely in­creased the abil­ity for ex­per­i­en­tial ini­ti­at­ives to be ex­ecuted and for prop­erty man­agers to ex­ecute a very dif­fi­cult and rap­idly chan­ging en­vir­on­ment with­in their com­munit­ies. Can you give an ex­ample of this ex­per­i­ence in prac­tice?  We use Utopi, which de­scribes it­self as a data in­teg­ra­tion plat­form that provides real-time in­sight and ana­lys­is across a port­fo­lio. Its dash­boards ag­greg­ate op­er­a­tion­al and en­vir­on­ment­al data from sensors to bench­mark per­form­ance. Im­port­antly, Utopi – which we use in prop­er­ties we have in­ves­ted in and which are man­aged by Apache and Moda – also al­lows res­id­ents in these build­ings to track its per­form­ance, al­low­ing people to see the be­ne­fits of man­aging, for ex­ample, heat­ing and light­ing.We have also in­tro­duced Utopi to our stu­dent ac­com­mod­a­tion as­sets and saved 8% to 10% in en­ergy costs at these build­ings – which is in­cred­ibly ac­cret­ive to our funds. Where does ESG fit in­to your vis­ion of tech­no­logy?  We have a ded­ic­ated team of four people with­in Har­ris­on Street, en­han­cing ESG per­form­ance across all of our fund products and with­in our cor­por­ate or­gan­isa­tion. Tech­no­logy plays a key part in every as­pect of our ESG strategy – from cap­tur­ing data to driv­ing new build­ing and op­er­a­tion­al tech­niques to op­tim­ising per­form­ance. ESG is one of our key pri­or­it­ies across our glob­al firm and is cent­ral to our in­vest­ment and deal se­lec­tion strategies. How im­port­ant is tech­no­logy in life sci­ences real es­tate?  Life sci­ences op­er­ate at the cross­roads between large pharma, tech­no­logy and edu­ca­tion. Re­search and de­vel­op­ment in­cub­at­ors have tech­no­logy at their heart, and are pivotal to how life sci­ences real es­tate func­tions. In­cub­at­ors are col­lab­or­at­ive spaces with mul­tiple ten­ants on vary­ing lease lengths – col­lab­or­at­ing to­geth­er to­wards a com­mon goal of de­liv­er­ing world-lead­ing life sci­ence solu­tions. Tech­no­logy is the cata­lyst that makes this pos­sible. We are only just be­gin­ning to real­ise the po­ten­tial of tech­no­logy in life sci­ences and real es­tate as a whole.At Har­ris­on Street we want to be at the fore­front of tech­no­logy ad­op­tion and to al­ways be ex­plor­ing ways to im­prove our com­munit­ies which we in­vest in.
Be­low is the meth­od­o­logy used for CMS Real Es­tate Re­bound re­port, to get more in­form­a­tion about this, please con­tact: [email protected]­sult­ing.com
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