Nabarros elbows out SJ Berwin on Peabody deal

Nabarro Nathanson has beaten SJ Berwin to a real estate job on the largest property portfolio purchase in Central London this year.
Peabody Global Real Estate Partners and Peabody International Real Estate Partners are acquiring nine London properties for £146m. These include premises in London's West End, such as 18 properties and two mews in Percy Street off Tottenham Court Road, and Lime Street near Liverpool Street, home of Lloyd's.
The companies make up a $750m (£512.66m) fund, set up by US property fund Peabody to purchase property in Europe. This is only its second UK property shopping spree. SJ Berwin acted as sole UK legal adviser on the first – the £300m acquisition of London office estate Cutlers Gardens in February – but was usurped by Nabarros this time around.
Nabarros commercial property partner James Madden is happy to admit that his firm poached Peabody from its real estate rival. “Another commercial property partner Geoffrey Lander, through his role as US business development specialist, actively won the instruction through a contact he made at Peabody,” said Madden.
According to a Peabody spokesperson, both Nabarros and SJ Berwin have an equal chance of working on the company's next UK acquisition.
Although Peabody Global Real Estate Partners is a European-focused fund, Peabody incorporated several special purpose limited liability companies in the US to actually purchase the properties. This was a European deal done in the more tax-efficient US way.
The bulk of Madden's work on the deal was the structuring of the acquisition vehicle, including incorporating the US limited liability companies. US firm Cravath Swaine & Moore advised on US legal issues surrounding the incorporation of the limited liability companies.
Nabarros corporate partners Gwen Buchan and Chris Luck, banking and finance partner Andrew McLean and tax partner Peter Kempster worked with Madden on the deal.
Peabody bought the property from Security Capital European Realty's CWE portfolio. Denton Wilde Sapte, long-term adviser to Security Capital and its asset manager City & West End, advised the vendor. Property partner Stan Gnadiadkowski led the Dentons team.
The purchase of the portfolio was structured for a UK-based sale. Security Capital purchased it originally with financial help from Morgan Stanley and DePfa. Morgan Stanley and DePfa were also debt providers when Peabody bought the portfolio through a mixture of equity and debt. Morgan Stanley was advised by Dentons, while DePfa instructed Clifford Chance.
Gnadiadkowski said: “It was an unusual deal because the debt was already there. It was somewhat like buying a house, but sticking with the original owner's mortgage provider.”