HSF Kramer’s Seth Niedermayer On Architecting Private Equity’s Real Estate Rise

HSF Kramer’s Seth Niedermayer has a front row seat to the rewiring of U.S. real estate investment. 

The law partner currently has 17 deals on his plate, the majority of which have private equity in the driver’s seat. Among those transactions are partner-side joint ventures, representations for lenders and borrowers on construction loans, and a sale-leaseback transaction. 

Niedermayer’s workload fluctuates frequently, but private capital is dominating the stack, literally and figuratively. Private equity’s growing dominance is yielding highly structured deals, a lot more leverage and a booming debt fund business. The increasing complexity of real estate investments, paired with high interest rates and market uncertainty, has the effect of slowing negotiations. As a consequence, Niedermayer’s to-do list is full and then some.

He’s not complaining, though.

Niedermayer says he thrives on variety, making him well suited to the dynamism of HSF Kramer’s real estate group. The Bethesda, Md., native comes by his skill set honestly. His father still practices as a litigator, and his mother worked in governmental law. To top it all off, he has a New York City real estate broker for a brother. 

When Niedermayer earned his juris doctor at Columbia Law School, he chose an alternative path from his parents, in the “accretive and constructive” work of navigating deals and advising transactions. So much so that a colleague of his brother once mistook him for a broker.

“I like introducing people to each other and saying, ‘You guys should talk, there might be something here,’” Niedermayer, 42, said. “It just feels like you’re building something, as opposed to litigation, when you’re fighting over something.”

From novice to expert

Niedermayer departed international law firm Simpson Thacher & Bartlett in 2015 to join HSF Kramer, then known as Kramer Levin Naftalis & Frankel. He arrived as an associate with hardly any real estate experience, but Dan Berman, managing partner of HSF Kramer’s real estate group, said Niedermayer had the work ethic and business development sense necessary for the gig.

“Seth is extremely bright, he’s not out there to let anyone know it,” Berman said. “He’s out there to get the deal done and get things done right, and have the right outcome for the client.”

More than a decade later, Niedermayer’s client list includes Mitsui Fudosan America, Hudson Bay Capital Management, BlackRock, Vici Properties and LCN Capital Partners. His practice areas span acquisitions, joint ventures, both borrower and lender-side finance, and development across asset classes. 

“I like his ability to take complicated situations and simplify the issues,” Randall Shy, a managing director at Hudson Bay, said. “We like to pride ourselves on discerning the difference between actual and perceived risk, and, with someone like Seth at our side, who can work through a complicated set of circumstances and facts, and simplify them, that is really a powerful tool for us.”

Niedermayer was tapped in 2024 by Hudson Bay for the recapitalization with RXR of 620 Avenue of the Americas, which the two firms now jointly own. He also represented Hudson Bay in a roughly $238 million refinancing deal at Edge-on-Hudson, a master-planned development in Sleepy Hollow, N.Y. Both deals had to thread new capital through existing, complicated asset structures.

In one of his largest deals, Niedermayer and his colleague Andrew Charles represented Mitsui Fudosan America in its lengthy joint venture with Related Companies and Oxford Properties Group at 50 Hudson Yards. The project was major in every sense of the word, and exceedingly complex. Niedermayer also worked on Vici Properties and Apollo Global Management’s acquisition of the Venetian on the Las Vegas Strip in 2022, a behemoth asset he described as “a mini city.”

The variety of his workload, Niedermayer said, strengthens him on every side of real estate negotiations. 

“You can say, ‘I understand where you’re coming from, I’ve been on your side of the table before, and I know there’s a position that may be a workable compromise,’” he said.

Shifting bases  

Niedermayer’s client base over the last 11 years, however, has dramatically shifted. The developer-focused work the firm was doing when he arrived has been steered by Jay Neveloff, partner and chair of U.S. real estate at HSF Kramer, into more institutional, investor-side deals. 

The shift occurred in tandem with the U.S. real estate market at large, where the old buy-and-hold model has faded into the rearview mirror, frequently replaced by sophisticated, private capital. 

Private equity’s appetite for U.S. real estate is particularly abundant, but Niedermayer’s clients have become increasingly selective about managers and assets. A domino effect of high interest rates created demand for more equity and more partners. On top of that, investors are turning from stable core and core-plus assets toward high-returning, hands-on sectors like data centers and senior living. 

“Unlike four or five years ago, you can’t just buy for cash yield,” Zachary Cion, a managing director at Hudson Bay Capital, said. “You have to either unlock complicated situations or have some sort of angle. Those are the deals that we’ve done, and Seth has represented us on all of those.”

The months-long joint venture negotiation Niedermayer did at 50 Hudson Yards, an anomaly at the time, is now commonplace. Gone are the one-page term sheets Niedermayer regularly received at the outset of his career, replaced by management-intensive plays that can last for 10 months.

“I can’t really recall, before the last few years, doing deals that would take that long,” Niedermayer said. “Part of it is the structuring — it’s putting together your whole capital stack — but a part of it is also the negotiations between buyers and sellers. I’ve seen a lot of pauses.”

Niedermayer is charting another notable turn in the tides of investment, in which market distress and dislocation is prompting a debt fund boom in private equity. The more opportunistic firms are taking advantage of note-on-note financing and sale-leasebacks, Niedermayer said.

“On the debt fund side, which has become a huge part of private equity and real estate, there’s so much opportunity,” he said.

Just a few years ago, he estimates his practice was about 90 percent joint venture and common equity transactions. Today, it’s a 50-50 divide with debt deals. Niedermeyer frequently works with private equity real estate fund manager LCN Capital Partners on sale-leaseback and built-to-suit deals –– LCN’s bread and butter. 

“We tend to use Seth for larger and potentially more complicated transactions,” Tom Wall, a partner at LCN, said. “I think that speaks to the trust we have in him and his team.”

LCN has tremendous opportunity in the sale-leaseback market, Wall said. The tool provides a competitive and cost-efficient source of capital for real estate. It enables companies to continue operating in their buildings as though they still own them, while freeing up capital to redeploy in other areas. 

“When you look at the private credit markets today, funds capping withdrawals, funds unable to continue flipping property from one private credit fund to another credit private credit fund, the need for alternative capital sources really has never been greater,” Wall said.

Private capital flooding the market is still largely concentrated in the largest sponsors — the Blackstones and Apollos of the investment world — but the number of family offices investing in real estate has grown substantially, Niedermayer said. 

“While they may not be investing on the same scale as those large private equity firms, there’s clearly a lot of opportunity for them,” he said. 

Flexibility is the defining trait of these family offices, Niedermayer said. Without a prospectus plan to hold them back, these firms form a veritable army of one, armed with plenty of capital, and plenty of time to be patient. 

Niedermayer previously helped Declaration Partners, a firm largely backed by David Rubenstein’s family office, in the acquisition of retail co-op units in Manhattan’s SoHo neighborhood. The unusual deal had a long-term lease with a purchase option, and required an unusual deal structure to allow for it. A large fund with a five-year investment term couldn’t have waited around for 10 years for a purchase option, Niedermayer explained. Flexible family offices can. 

“They just had that flexibility to say, ‘We like it, we like the potential here, so we can wait, and we can kind of structure it this way,'” Niedermayer said. 

Foreign firms, too, have been rising in the ranks of private capital investment in U.S. real estate. These clients make up a small share of Niedermayer’s book, but their presence has grown since the HSF Kramer merger, alongside the amount of capital they have to spend. These investors largely hail from the Asia-Pacific region, including Japan, Korea and Australia, and tend to be on the larger side, in the form of sovereign wealth or large trading houses. 

Foreign capital’s sentiment on the U.S. market varies across regions, Niedermayer has noticed, with European markets still pulling back. The pullback can be traced to any number of macroeconomic forces, from stock market fluctuations to tariffs and personalities.

Like any good lawyer, Niedermayer says as little as possible on politics. What he does say, however, is that foreign investors share a common interest: trophy assets in prime cities. 

Taxes remain a central concern when negotiating with foreign capital, but tariff uncertainties are being written into construction contracts now as well, Niedermayer said, and insurance costs are taking up a larger share of project budgets.

“People don’t want to put capital into something that may not work, and so there’s a lot of waiting,” Niedermayer added. “These development projects that may have been done a number of years ago aren’t moving forward yet, because costs are too high. That’s more of an underwriting issue than a legal issue.”

The structural changes in the way U.S. real estate deals are getting done, Niedermayer said, feel permanent. Families buying and holding across generations are being supplanted by institutional capital that can wheel and deal in short hold periods and sophisticated underwriting. These rising stars of capital need lawyers adept at complications, like Niedermayer, to do a lot of heavy lifting. 

“The model of leveraging, instead of being relatively unlevered, just changes the whole approach,” Niedermayer said. “I think that most of the market has gotten that sophistication, and so deals aren’t going to look the same way going forward.”