The Counselor: Laurie Grasso is a Lawyer Who Means Business
“I packed up my entire apartment,” Laurie Grasso said of her move to Sag Harbor on March 13, the day of an unspoken mass exodus from New York City as COVID-19 took hold. “I have three kids and I emptied out my pantry and we moved out here. We were here for maybe two-and-a-half days and my husband turned to me and said, ‘Oh…so we moved here long term?’”
But the change of scenery shouldn’t fool anyone.
It takes a lawyer of substance to help push a $435 million Manhattan office acquisition over the finish line during a global pandemic, and that’s exactly what Grasso, co-chair of Hunton Andrews Kurth’s real estate practice, did with Savanna’s purchase of 1375 Broadway. The deal — one of the very few large New York City property acquisitions to reach fruition during COVID-19 — closed on July 10. Savanna secured $389 million in financing for the purchase including a $200 million senior loan from Deutsche Pfandbriefbank and Aareal Capital Corp., a $104 million mezzanine loan from Brookfield Real Estate Finance and an $85 million preferred equity investment from Declaration Partners.
“This was an example of a buyer, a lending group and a preferred equity group being absolutely committed to closing a transaction in a short timeframe,” Grasso said. “It was a joy to work on. It took a lot of late nights but to close that deal in the middle of COVID the way they did was so remarkable. It’s something people will be talking about for months to come.”
Grasso may modestly defer praise to her fellow deal parties, but she played an “absolutely central and critical role in closing that transaction,” Nicholas Bienstock, a managing partner at Savanna, said. “We’re talking multiple counterparties and a complex, almost a half-a-billion-dollar deal at a time when capital markets had largely shut down.”
As COVID-19 shuttered New York City and Grasso juggled the complexities that come with closing a behemoth, multifaceted deal remotely, she was also busy fighting a bigger battle in her personal life: breast cancer.
Grasso was initially hesitant to mention diagnosis; it only took place last year, plus she felt that during this time of COVID-19 and social unrest “so many people are struggling.”
“My journey has changed, but I’m still me,” Grasso said. “I still want to do deals, be the best negotiator in the room, bring change to this industry and inspire my daughters.”
Not to mention inspiring the industry itself, as very clearly evidenced in the interviews CO carried out for this article. “I know now that my resume will always have cancer on it, but maybe that’s OK — especially when I’m able to edit my resume to say cancer survivor,” she said.
Building a Brand
Over the past two years alone, Grasso has closed 30 transactions totaling $8.5 billion, including Services Properties Trust’s acquisition of a net-lease retail portfolio from Spirit MTA REIT for a whopping $2.4 billion in cash in September 2019. She’s also grown Hunton’s real estate practice to 85 people with a whopping $50 billion in deals closed in the past two years.
“In building this brand at Hunton and growing the platform and being a manager, I feel like my lawyering is better informed,” Grasso said. “Because there’s a part of me that’s now also an entrepreneurial business owner.”
Grasso’s client roster includes private equity funds, institutional REITs, investors and other property owners, who enlist her help in acquisitions and dispositions, developments, financings, portfolio transactions, preferred equity investments, leasing and real estate joint ventures.
“Laurie is one of the most skilled real estate transactional attorneys I’ve come across in my 30 years in the business in New York,” Bienstock said. “To be an absolute top-tier transactional attorney, you need to be a creative problem solver. There are people who have technical training to do a transaction, and Laurie certainly has that in spades, but she also is someone with tremendous judgment and a trusted consigliere as we pursue transactions and assess risk. She has a terrific, deep experience base in multiple different types of transactions, whether it’s joint ventures, financings, restructurings or workouts. When you’re advising people across a spectrum of risk and outcomes that’s enormously valuable.”
Game, Set, Match
Grasso grew up in Endicott, N.Y. Her mother was a high school tennis coach and a typical weekend for the young Grasso would be sports-related, hitting tennis balls against the family’s garage door or practicing riding her bike to the neighborhood park, where it cost a quarter to go swimming. Her older two brothers were talented tennis players and sports and competition were a prevalent theme in her childhood, one that Grasso has carried through to her own family. She is a mother of three; Mia, 15, Blakely, 10 and Logan, 5.
“My kids sometimes joke that I’m a tiger mom when it comes to making them be involved in sports, but I found it to be so helpful,” Grasso said. “I wasn’t so focused on my studies; it wasn’t really something that was a passion of mine.”
That was until she got to Brooklyn Law School in 1996.
“I would go back today,” she said. “I just loved the Socratic method, and learning about contracts and negotiation. That’s really where I became a student. I think it took me a longer journey to realizing the importance of academics.”
Grasso was the first of her family to pursue a career in law. Endicott is the birthplace of IBM and a high percentage of the town worked for the company, including Grasso’s father — who was an engineer and worked on IBM’s very first personal computer. “It was probably the size of a small car. It was enormous,” Grasso laughed. The family had the prototype in their home for a long time until it was moved to Endicott’s IBM Museum. “My father worked very hard, and I know I learned from him that without hard work, there’s no success,” she said.
Grasso didn’t have the “engineering brain” her father had and — after briefly considering a career in professional volleyball — gravitated instead toward a law career, eventually landing at Herrick Feinstein in 2000. The firm had two strong practices at the time: sports law and real estate. Being a former athlete she thought sports law would be her calling, but new lawyers at the firm were rotated between the two practices, and she instead found herself gravitating toward the real estate group.
When she was getting her feet wet it was a very different era for the industry. “The characters of New York real estate were so vivid back then,” Grasso recalled. “Your client would be buying a building and you’d walk into their office and they’d be smoking a cigarette, or a deal would close and the brokers would show up with champagne and glasses. It was a different time and much more personal with in-person closings, I think because at that time real estate wasn’t so capital markets-focused.”
In addition to smoke-free closing rooms, another big change is the increased number of deal parties, Grasso noted. After all, any party buying a building today is rarely buying it alone, there’s usually a partnership; or, if they’re buying it in a fund, there are fund investors involved; and if you’re putting together debt, the mortgage lender may be bringing in participants or syndicating the loan.
But the complexity of today’s capital stacks is a good thing, Grasso said: “It means that there’s so much more liquidity and capital available for deals, and I think we’ll see this coming out of COVID. Once people feel comfortable that they know the direction the country is going with respect to this pandemic and they can start to underwrite transactions again, all of this liquidity will be waiting for them. It’s a positive for the resiliency of real estate.”
And complicated transactions are Grasso’s forte.
A Virtuoso Performance
“We’ve been in the trenches together, and there’s nobody I’d rather have in the trenches with me on complex situations,” Joshua Benaim, a founding principal of Aria Development Group, said. “She’s a great person, and she has a sense for good people.”
Benaim needed the help of an expert lawyer when he purchased a note on a Florida property during the last crisis. Two banks were the lenders, one of whom went under and was closed by the FDIC in the midst of Aria’s due diligence period.
“We were negotiating for what we viewed as possibly the last undeveloped parcel of land on South Beach,” Benaim said. “It was an exquisite property, but it was encumbered. This was in the midst of 2010 and everybody thought we were crazy to be purchasing this piece of land and that we’d completely taken leave of our senses, but we saw it as a brilliant, exciting, irreplaceable location. We were able to make a deal with the noteholder, and so we were pursuing the deal in a very complex structure with Laurie as our guide. We first had to negotiate the deed-in-lieu of foreclosure [with the borrower]. He had disappeared to Europe and we managed to somehow track him down in Paris. We had to have the documents signed in Paris at the U.S. Embassy because the laws of have a deed transfer require you to be on U.S. soil. He signed the pages — but there was one page missing. By then he’d disappeared again. Finally, we tracked down the borrower in Budapest, and had someone meet him at the U.S. Embassy there.”
“When we finally got a report that he had actually signed the document, Laurie coined a now-famous phrase, which is: ‘I just dropped my latte!’ And basically, for the last 10 years, in our company, the phrase, ‘I just dropped my latte!’ means ‘We just got the deal.’ Any great news has been received with that phrase.”
Benaim recalled the experience as an “epic, crazy, awesome deal,” adding that “Laurie was the one who initiated us into the world of real estate value investing with all its legal complexities. It really was a virtuoso performance on her part.”
David Dishy, the president of development at L&M Development, first met Grasso when she was working at Herrick Feinstein. “She was impressive from the very start,” he said. “I don’t want to perpetuate the sports image that she has, but she’s really got that athlete mindset. She’s driven, she’s focused and she really appreciates healthy, intense competition and working hard to get stuff done; the kinds of things that people often associate with being a high-performance athlete.”
Grasso continues to represent L&M at Hunton and when the firm — together with Invesco — acquired a 2,800-unit portion of the Putnam portfolio from Brookfield Asset Management and Urban American for $1.2 billion in July 2019, she was firmly in play.
“That deal was very much Laurie,” Dishy said. “One thing that’s important to know about her is she loves introducing her various clients to encourage business growth. She’d actually made an introduction to Invesco to our fund team prior to the deal. That introduction planted the seed, which then turned into us doing a joint venture.”
Indeed, “the real estate world is a very small universe,” Grasso said. “You may be dealing with someone on a deal one day and they’re the buyer, but two weeks later you’re dealing with them again and they’re the lender.”
Dishy described Grasso as “a business-savvy lawyer, which in a real estate transaction space is critical. You’re comfortable that she’s thinking about the legal repercussions and being careful on your behalf, but she also understands when to push and when to say “I can live with the business aspect of this,” which is your dream mix in a lawyer.”
Dishy gave an example of a time where L&M brought Grasso into a deal after a term sheet had been signed (“Not a good idea,” he said) and a fight was underway between the deal parties. “Our prospective partners’s lawyer were hammering that their position was supported by what was in term sheet; and Laurie politely said, ‘Listen, if I had been involved, the term sheet would never have said this and we can’t let this happen this way. If we want this to be a healthy partnership, we’re all going to have to see the bigger picture.’ There was a resolution and the deal got done in a fair way.”
“I’ll negotiate and defend my clients to the fullest,” Grasso said, speaking generally of her approach. “But at the end of the day, we’re people with integrity, and we’re going to do the right thing. I’m never going to get in the way of a deal closing, but there are some lawyers who feel like they always have to win, and I think that’s doing a real disservice to their clients.”
The delicate art of negotiation is Grasso’s favorite part of the job, and a skill she learned early in her practice. “Part of my training was to sit and listen in on calls, being critical of negotiation styles. I learned that one of the best tricks in negotiation is to listen to the other side and find a way to give them what they need in a way that’s not detrimental to your client — so, give someone a nugget. You can take the entire golden bar, but you have to listen to what the other side wants,” she said.
Dennis Craven, COO of hotel real estate investment trust Chatham Lodging Trust, first met Grasso around the time of the REIT’s IPO in April 2010. Over the past 10 years, he’s done around $5 billion of transactions with Grasso.
“I’ve dealt with plenty of lawyers that want to start with loan terms that are just unreasonable,” Craven said. “The problem with that is you end up negotiating forever trying to get to what’s a reasonable loan agreement. With Laurie’s experience on both sides of the equation she has a tremendous amount of street credibility with other attorneys and is reasonable from the outset. It’s easy for her to say, ‘Hey, listen, that’s not a market rate, that’s not a requirement of the borrower. Come on, let’s be reasonable here.’ It’s that experience and credibility that allows her to cut through all the B.S. and get to a reasonable agreement for both the borrower and the lender.”
That borrower/lender savviness came into play during the fourth quarter of 2019. “We were doing a $850 million loan that involved lenders from the U.S. and Korea, and being able to bridge the gap with counsel that’s representing foreign investors on a mezzanine loan was challenging for everybody,” Craven said. “Laurie used her knowledge to ensure reasonable asks for both sides. She was available 24/7 even though she’s got a lot of stuff going on in her personal life at the moment.”
Chatham currently has a large line of credit with seven banks and it recently had to work through an amendment due to the coronavirus’ effects on the hotel industry “Laurie was instrumental with that, and we’re actually working on another closing this week. So, we’re keeping her busy,” Craven said.
Destined for Success
During the first few weeks of the pandemic, most of Grasso’s clients were in asset management mode, and she found herself doing more general counsel work, helping them analyze the day-to-day business issues of COVID-19. On April 1, at the height of the pandemic in New York, Grasso was named co-chair of Hunton’s global real estate practice.
Deal mode has kicked in again over the past few weeks, Grasso said: “I think because New York was able to get to the place, in terms of reopening, where it’s allowed clients to see the deals they can be doing, and what the opportunities are.
Since the [COVID] numbers are better and offices have reopened, people are starting to look at deals again. As you know, real estate people want to be doing deals.”
The crisis’ time period has also brought a sharper focus on inclusion and diversity in the industry, something that’s long overdue and something Grasso has championed for years.
Hunton Andrews Kurth is the legal partner to Project Destined, an organization where minority youth and veterans are transformed into real estate stakeholders, and Grasso is also co-chair for New York’s “She Builds” program, an initiative of Rebuilding Together NYC.
Grasso excitedly describes Project Destined as her “obsession.” Started by former Carlyle Group principal Cedric Bobo, its programs are entirely focused on encouraging diversity in real estate and a place where teenagers become real estate students, taking online training courses to understand the fundamentals of the business. Brookfield’s Ric Clark is another of the heavy hitters involved.
“We go into cities and we invest in real estate.” Bobo said. “We launched in New York with the support of A-Rod and J-Lo and we’d worked with Hunton Andrews Kurth in a few other markets before that. People keep telling me, ‘You’ve got to meet Laurie in New York,’ although I didn’t fully understand what that meant until I met her. What I appreciated about Laurie from the very beginning is that she brings the same intensity, no matter what the job is. She’s helped us bid on real estate in New York and connect with potential sponsors of students in our program, always with the same professionalism and intensity.”
When Project Destined was bidding on New York real estate for the first time, “Laurie was an invaluable resource to help us demystify the city,” he said. “When I’m entering any market she’s now one of my first calls, because she has a network that expands far beyond New York and she’s always willing to use it to support our growth.”
“I think of her almost like a brand,” Bobo continued. “It’s in certain people’s nature to be community builders, and in building your career or executing a deal there are so many parties involved in making it successful. She’s cultivated a community of people who are bought-in on making each other successful.”
Further, Grasso is an ideal emissary for change in the real estate industry, because she represents excellence, Bobo said: “There’s no sacrificing quality or standards because she’s adding diversity. The best ambassadors, whether it’s Laurie or Ric Clark, they’re lending you their brand so you can then make your own story happen.”
As for Grasso’s dedication to Project Destined during her health struggles, “there’s never any compromise. It’s always excellent,” Bobo said. “What I always admire about her is the equal portions of joy and commitment in what she does. I want my students to find that in themselves.”
Grasso introduced Rachel Loeb, COO at New York City Economic Development Corporation, to Project Destined. The two first crossed paths when Loeb was working as director of development at World Wide Group.
“We took to each other right away, and she quickly became more than just my counsellor. She’s one of my dearest friends,” Loeb said. “Laurie has this unique ability. She’s super smart, she serves her clients well and she is all about getting the deal done. She understands that you have to pick your battles and she knows which battles are most important for her clients. Then, she’ll fight for those things.”
Loeb recalled a World Wide Group land sale in 2015 with a very tight timeframe: “The offer on the table for the buyer was to get the deal done in one week, and we went from negotiation, to a term sheet to signing a document within a week. It was the craziest thing, but Laurie was driving this deal and it demonstrates her being completely aligned with her client to make sure a deal happens.”
“She’s ambitious, and I know a lot of times people use that word in a condescending way particularly when they talk about women,” Loeb said. “Part of the thing that she and I found is our like-mindedness, in that we both are driven and ambitious and want to succeed. We’ve made active choices in terms of the careers we’re in. So, whether you call it competitiveness in sports or driving yourself to success and perfection and being the best, that takes hard work and discipline.”
Speaking of driving, her clients certainly trust Grasso to pilot their deals.
“There are all these parties in deals, everyone’s screaming and yelling, but you need to maintain momentum,” Dishy said. “People know she’s fair and trustworthy so they’re willing to say, ‘Hey, you know what, let Laurie drive this deal, because she’s going to be fair minded in getting stuff resolved.’ I’m always happy to get on the bus that Laurie Grasso is driving because wherever she’s going, it’s going to be somewhere good.”