Mission: complete one of the City’s largest and most complex property deals. Timeframe: eleven days. Trainee Joanna Payne describes some of the demands and deadlines she faced in her first seat.

What do most trainees hope for in their first seat? Ideally, a great team environment where they get plenty of responsibility and opportunities to deal directly with clients – plus a big meaty case to get their teeth into. In her first seat with Herbert Smith’s real estate division, Joanna Payne got the lot.

“I really enjoyed my seat in real estate – especially having plenty of client contact and the chance to run my own files,” she comments. “Considering it was my first seat, it was great to have clients asking me for things that only I could answer. Of course everything was checked, but I really relished the opportunity to deal with clients’ queries at such an early stage in my career. Plus I had one of the City’s biggest ever property deals to work on.”

This was Rockpoint Group’s acquisition of 12 office blocks at Cutlers Garden – a £400 million plus transaction that was one of the City of London’s top three property deals of 2006.
“I was the only real estate trainee on the team,” Joanna recalls. “That was really good because it meant I worked directly with Ian Cox, the partner running the deal. I got to see at first hand what the partner’s role is on large deals, and I learnt a tremendous amount both about the law and about what’s involved in running a deal team.”

Ian Cox takes up the story. “Rockpoint is a US-based private equity property fund that is a relatively new client, and has only really started investing in UK property within the last 18 months or so,” explains Ian. “Interestingly, this was the second time Herbert Smith has advised on deals involving Cutlers Gardens – the first being when we acted for Standard Life when it sold Cutlers Gardens to Peabody Global Real Estate Partners in 2001.”

Peabody were now the sellers – and Herbert Smith’s prior experience of Cutlers Gardens came in very handy, given the extremely tight two-week deadline for completion of the deal.

“Rockpoint had been looking at Cutlers Gardens for a few months,” says Ian. “The development hadn’t yet been generally marketed, so Rockpoint wanted to move very fast to do what was effectively an off-market deal direct with Peabody.”

The resulting time pressure was compounded by the sheer size and complexity of the deal, and the breadth of expertise required. The tax-efficient deal structure involved Rockpoint acquiring Jersey property unit trusts (JPUTs) and corporate vehicles that owned the properties. To cover all the angles in the required timeframe, the team included five partners, 14 associates and seven trainees, and was drawn from practice areas including not just real estate but tax, finance, corporate and insurance.

“For the 11 days we were doing the deal, the workload was extremely heavy,” comments Ian. “At best it was a case of three or four hours’ sleep a night for most of that time, and around the completion meeting it went down to no hours’ sleep for a couple of nights. Throughout, the team worked extremely well together because everyone was fully engaged and involved from day one. Every element – real estate, corporate, finance, tax, insurance – was interlinked and interdependent. Everything had to be aligned for the structure to work.”

It did – partly due to Joanna’s solid co-ordination and organisation. “It’s fair to say my role was more administrative than legal, as the associates obviously did the reports,” she recalls. “I was essentially collating the mass of information, whereas a trainee on a smaller deal tends to get more responsibility for the overall deal. I worked especially closely with the finance and tax people, which was very interesting.”

While Joanna did not actually work through any nights, there were times when the pressure was on. “I remember one evening when Ian was in a meeting, and was emailing me to check whether we had seen various pieces of information,” she says. “I knew I had to get everything right. But I had played such a large role in collating the information
that I pretty much knew the answers already.”

As a result of the deal, a new insurance product was created to underwrite various warranties. “This is something I think will be used increasingly in the market in the next few years,” says Ian.

The size and complexity of the deal created a need for more substantial contact than Ian had expected with the US. “It wasn’t a case of getting a straight ‘yes’ in London – we spent a lot of time talking directly to the principals in the US and explaining how things work here.”

The key thing Joanna learnt on the deal was the importance of organisation. “My biggest challenge was the sheer volume of emails and paperwork that came in and had to be sent to the right people,” she comments. “And when queries came back to me I had to collate them and forward them to the other side. But it was great working with all the different practice areas – everyone was so helpful and supportive.”