Recently, while in the midst of a managing a complicated commercial real estate closing, I took a few hours off to attend an orchestra concert. During intermission, while orchestra took a break, a string quartet played in the lobby.
The quartet, which has only four musicians, each playing his/her own part, played beautifully together and created a unified musical expression without an obvious leader. The orchestra, which had about 75 musicians playing at least 15 different parts, also played beautifully together and created a unified musical expression, but under the direction of a conductor.
It was then that I realized that the typical commercial real estate transaction frequently has at least 15 different roles and is much more like an orchestra than a string quartet. A commercial real estate transaction has a huge cast of characters, including a buyer, seller, and each of their respective real estate brokers, mortgage lenders, property managers, and attorneys. In addition, there is a title company and escrow agent, a surveyor, and in a more complicated ownership structure, partners or investors in the buyer and/or seller or mezzanine or other secondary lender, and many of them have their own attorneys, as well.
Just as each instrument in an orchestra has a role, each of the parties and attorneys involved in a commercial real estate transaction has a role. Just as the instruments in an orchestra sometimes will have the melody and sometimes will provide supporting harmony, the parties and attorneys involved in a real estate transaction may migrate from central roles to supporting ones and back again during the course of the transaction.
The members of an orchestra have a common goal – a unified musical expression. The parties to a commercial real estate transaction also have a common goal – the successful completion of the transaction on terms acceptable to the party they represent. And, like an orchestra conductor, an attorney experienced in transaction management helps the players in a commercial real estate transaction work together to reach their common goal.
Michael Tilson Thomas, conductor of the San Francisco Symphony, said “Being a conductor is kind of a hybrid profession because most fundamentally, it is being someone who is a coach, a trainer, an editor, a director.” World-famous violinist Joshua Bell commented on the plight of the conductor:
Being a director or a conductor is a balance of many things. And to do it right is a very difficult tightrope to walk. I’ve come to the conclusion that there’s really no way to be one hundred percent popular as conductor.
Like an orchestra conductor, an attorney serving as transaction manager likewise must wear many hats and carefully navigate while serving as both attorney and business advisor to his/her client (frequently the buyer), while also creating a roadmap for the transaction and taking steps to remove obstacles blocking the road to closing.
There is a difference between the role of an orchestra conductor and an attorney transaction manager, however. An orchestra conductor is coordinating individuals who do not probably could do his or her job themselves. Virtually every musician in an orchestra has studied conducting – it is usually a requirement to obtain a music degree – and some probably have conducted orchestras themselves.
Many orchestra musicians may have studied the music score being performed and even more frequently, the musicians have played the music with an orchestra previously, so they are familiar with its intricacies. String quartet members similarly are likely to be intimately familiar with the music they are playing.
With the string quartet, it is that experience with the music, combined with the collaborative nature of a quartet that enables the musicians to create a common musical message without the benefit of a formal conductor. With an orchestra, however, due to the sheer number of different parts, someone needs to select the path the orchestra will follow to a unified musical message. Among other things, a conductor fills that role.
Unlike either an orchestra or a quartet for that matter, a real estate transaction, the parties may have varying degrees of experience in commercial real estate. Unlike a musical ensemble, real estate transaction parties most likely have received on-the-job training, as it is uncommon for people to formally study real estate in college or graduate school.
Further, unlike with an orchestra or string quartet, it is very rare for the individuals in a transaction to have previously worked with the real estate involved and to be aware of its intricacies – and its pitfalls.
Therefore, in addition to selection of a unified pathway to the common goal of closing, the parties to a real estate transaction need someone walking ahead of them with a machete to create that pathway by the most direct route possible. As Joshua Bell noted, this may not always make the real estate transaction manager popular, but it does make her essential to the transaction’s efficient and successful closing.
The rare real estate investor may be a swashbuckling, real estate guru who is familiar with every square inch of the property, is experienced in real estate titles and finance alike, and is willing to personally forge a new trail towards the closing. However, if that doesn’t describe you, then you, like a major orchestra, should consider hiring your own real estate transaction to “conduct” your transaction.
© 2017 by Elizabeth A. Whitman