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RE attorney joins workout team.

After 36 years as a real estate attorney, John "Larry" C. Nelson is now representing institutions as a business advisor who has full knowledge of all the legal ropes of a property workout.

As of Jan. 1, Nelson retired from his post as partner and senior real estate attorney at Milbank, Tweed, Hadley & McCloy and joined HRH/Clifford as a managing director of the real estate advisory, management and construction firm.

While at Milbank Tweed, Nelson worked, as did Clifford's Chair Steve Mann, on the workout of $1 billion worth - 5.5 million square feet - of property on behalf of Berisford Properties, the British institution. Some of the property was sold and some was given to lenders while the rest, including the 1.2-million-square-foot Blue Hill office property, in Rockland County, was retained with restructured loans to be operated by Clifford. The building, designed by Skidmore, Owings and Merrill, is 90 percent leased and some of the major tenants are NYNEX, Allstate Insurance and MetLife, which all renewed leases.

HRH/Clifford is a joint venture of Clifford Management and HRH Construction. According to Nelson, HRH/Clifford offers a comprehensive approach to workouts including debt analysis and restructuring, partnership restructuring, asset management, property management, leasing, marketing and construction management.

HRH/Clifford is currently focusing its efforts on serving foreign institutions that have U.S. partners in American property investment.

"When a [foreign] company finds itself in trouble and part of the assets and liabilities are U.S. real estate you have to have someone who can look at it..."

In the position of managing director, Nelson will oversee debt restructuring for workouts, partner negotiations and litigation management. As an experienced real estate lawyer, Nelson said he brings to the firm the legal analysis that is required for institutions to achieve their workout goals - to get from "here to there."

During the 80's, Nelson said, a trend emerged wherein troubled investors approached workouts with a bankruptcy attorney at their side. Nelson believes that workouts should begin with real estate attorneys with bankruptcy attorney on hand if needed. When accompanying a client to a meeting with partners or banks, Nelson said, he serves as more of an "executive on the spot" than an attorney.

"Institutions are use to working with real estate people because you speak the same language," he said. "I think the psychology of saying |here's my attorney and he's a bankruptcy attorney' sort of spooks the whole process."

In addition to legal expertise, HRH/Clifford'sprofessionalsareskilled in portfolio management, construction, leasing and property management. The firm's professionals will either execute the elements of the workout personally or hire and oversee local contractors.

"When we say we're going to implement a plan we actually have a staff to supervise," he said.

The Clifford approach, Nelson said, entails finding out what the overall problem is; finding out what the institution is trying to do; evaluating the assets - which are to be held, which should be disposed of or which can be worked out; working out with partners and acquiring control of the assets; and meeting with the banks to devise a plan.

They firm is currently working with a group of English banks on a number of investments in California, Las Vegas and some on the East Coast.

Through its workout efforts, HRH/Clifford has taken title to 3 million square feet of real estate in the New York area. In addition to Blue Hill, the firm is doing a major renovation at 115 Broadway, adjacent to Trinity Church, for FGIC (Federal Guarantee Insurance Corporation). Kohn Pedersen Fox is doing the tenant work on the landmarked building that has the same architectural flavor as its neighbor Trinity Church. Clifford's other New York properties include 290 and 292 Madison.

Nelson will be drawing on a rich career in real estate law. His curriculum vitae reads like a who's who of real estate in the past 35-or so years.

"I spent a lot of my life representing institutions," he said. "So I understand the institution's approach and the institution's attitude." He also dealt extensively with development companies.

During his tenure at Milbank, Tweed, Nelson counseled banks and insurance companies in their mortgage loans and acquisitions. During the 50's, Nelson worked with the Chase Manhattan Pension Fund, the second biggest at the time, when they decided to put 20 percent of their funds in real estate. The Chase fund pioneered sale-lease backs, innovative mortgages and other devices. And, in the 60's, he worked with REITs, such as the Equitable REIT and the MONY REIT.

In the late 60's and early 70's, he worked with Rockefeller Center when they developed the Exxon Building and the McGraw Building, the Celenese Building, and Wells Fargo building in Los Angeles. He worked with many other developers in New York like Gerald Hines and Mort Olshan.

He has also worked with foreign investors in the investment of billions of dollars in the U.S. particularly in New York. He counseled Middle Eastern investors when after the oil crisis they invested heavily in New York and with many Far Eastern groups, during the 80's, such as Kumagai Gumi.

He worked with many Fortune 500 companies such as Exxon, ABC and Marriott in their acquisitions, leasing and development activity.

He represented the English when they built the Pan Am building and Met Life when they bought it.

Nelson is an innovator in various areas of real estate law, particularly the transfer of development rights. Nelson was counsel to Lincoln Center and Battery Park City.

"So it's been both sides of the table through the years," he said.

Though his role at HRH/Clifford is somewhat different, Nelson said, his approach to his clients will be similar.

"As a lawyer, you don't solve the problem," he said. "You tell both sides what the issue is, so there's no misunderstanding, and let them decide how they want to solve it."

PHOTO : Larry Nelson, managing director, HRH/Clifford.
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Title Annotation:real estate attorney John Nelson
Author:Fitzgerald, Therese
Publication:Real Estate Weekly
Date:Mar 4, 1992
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