Barry has broad experience in all aspects of commercial property. Barry has specialist expertise in data centres and real estate related insolvency and has led numerous complex multi-disciplinary transactions with significant real estate assets including complex acquisitions or restructurings of real estate holdings and mergers and acquisitions of real estate intensive enterprises.

Barry has particular expertise in advising on transactions with significant real estate assets utilising a data driven approach to manage the risk for the clients in an efficient and appropriate manner.

Q&A

Have we seen the end of RE insolvency for this cycle?

I don’t think so. Whilst there is a significantly more upbeat mood in the real estate market the reality is that apart from prime areas (e.g. London) the value of real estate has not returned to the levels they achieved at the height of the boom. This, coupled with the very high levels of leverage attained at that height means that on paper a significant amount of real estate is insolvent. However, there has been a significant shift in ownership of the underlying debt from the clearing bank lenders to private equity and other ‘new entrants’. The game plan of these new players remains uncertain and since they are not subject to the same pressures as the originators of the debt we are likely to see continuing uncertainty in the real estate market for some time around potential enforcement.

Does current insolvency legislation damage or protect the high street?

Insolvency legislation has to strike a very difficult balance between protecting creditors and encouraging entrepreneurs. Before the days of limited liability that balance was maintained by the very real threat that a failed entrepreneur lost everything and even risked debtors prison. I think that the current legislation does a pretty good job. The problems facing the high street are not being caused by insolvency legislation. In fact they are the challenges created by the fast paced change in technology. The high street is not in any different position; it is simply more obvious how it is affected by the tidal wave of technology based solutions that are encroaching on the traditional way of delivering goods and services. An interesting question could be whether current insolvency legislation is up to the task of managing insolvency in a globalised cloud-based business environment.

What is the best approach to due diligence on large portfolio transactions?

The most important rule is that one size most definitely does not fit all. Often what drives a poor approach is fear and in particular fear of the unknown – “I need to know everything possible”. But if knowing something doesn’t (i) affect value or (ii) require a change in approach then what is the benefit of knowing? In some cases it may be sufficient to be certain that the properties are all registered in the name of the seller and then obtain insurance to cover other risks. Sometimes you might adopt a value based approach reviewing the most valuable properties/leases in more detail. In each case though you need a confident advisor who understands the real risks involved. That advisor must know (i) how to structure the due diligence to manage the risks of the acquisition (ii) advise clearly on the impact of the due diligence approach to future management of the portfolio and (iii) know which risks cannot be mitigated by due diligence or whether the cost of the due diligence to identify/quantify the risks will outweigh the benefit.

Representative Experience

  • ServerFarm - on its acquisition of a data centre site, including producing lease arrangements with anchor wholesale tenants and co-location agreements for existing tenant.
  • Advised on structuring lease assignment and reversionary lease from landlord.
  • A Family Office - advising on its acquisition of a fully let data centre near Bristol and advising on renewal and asset optimisation options.
  • A funder and its appointed receivers - advising on the management and disposal of a large regional data centre let to a Telco provider.
  • A large UK retail corporate - on various aspects of its data centre leasing.
  • A US based Multi-Family Office - on structuring and terms for an option and forward funding of a 40MW UK data centre development.
  • Aviva Commercial Finance - on all aspects of its disposal of a mixed portfolio of residential, office, retail and industrial units. We had three months to get from no information to exchange including providing vendor due diligence, title insurance and verified tenancy information on in excess of 500 tenancies all in an insolvency scenario.
  • Royal Bank of Scotland - on all aspects of its distressed loan book. Barry manages a multi-disciplinary team assisting in the controlled review and management of the exposure to distressed real estate in the UK. No other firm has disposed of as many distressed real estate assets at an asset level in this country.
  • A joint venture between Network Rail and Lloyd Dorfman - on the setting up of the framework for and all aspects of its roll-out of online shopping collection and return locations across the UK.