Commercial Real Estate Attorney Shares How Investors Protect Deals, Assets, and Reputation

Richard Crouch (Woods Rogers) (00:00)
I think maintaining a good sense of transparency, being very honest. And I know that that goes without saying, but particularly during difficult times, because it’s how you navigate those difficult times that really impact your long term.

reputation and if you do have a goal to be doing this long term, your reputation becomes your currency.

Quentin (01:53)
Hello everyone. Welcome to the Real Estate Pros podcast. I am your host Q Edmonds and I’m excited to be here today. I’m excited because of my guest. I love saying this word stick-to-itiveness, right? And he has stick-to-itiveness. We tried to do this before. We had to circle back around, but he’s here. He gave me his time and I am so, so appreciative. And so I’m going to let him tell you everything that he’s involved in, everything that he does, but I’m so excited to introduce you all to-

Mr. Richard Crouch. Mr. Richard, how you doing today,

Richard Crouch (Woods Rogers) (02:25)
I am doing well, glad to be here.

Quentin (02:27)
Absolutely. So glad to have you, man. And listen, I’m going to tell you, I like to dive right in. So I would love for you to tell the people what’s your main focus these days. Kind of an origin story, kind of how you got into the space that you’re in. Like we love origin stories. And then if you don’t mind, tell them what part of the world you’re in. People love to know what people are geographic. And so what you’re up to, your origin story, and where you are. Mr. Richard, sir, you have the floor.

Richard Crouch (Woods Rogers) (02:50)
Okay, so I am a commercial real estate attorney, business attorney. I’ve been doing it a little bit more than two dozen years. It’ll be 25 years this fall. And I’ve actually worked at the same firm this entire time, which is kind of rare, but it was a good place. And I stuck with it and learned a lot. And I was telling Q before this call, I was just very blessed to have very good mentors that

taught me a lot. ⁓ One was very good on the technical aspects and one was incredibly good on just client management and retention and just the no nonsense approach to practicing law and structuring deals. I definitely use what they taught me every day in terms of issues that can arise, how they’ve dealt with them. it’s been really nice because now with the younger associates that are on my team.

being able to impart a lot of that knowledge to them. I’ve also, in the latter portion of my career, started to invest on my own on the side for smaller rental properties, basically 12 units and below. And ⁓ it’s been a great experience. I’ve learned a lot in that process too. I do like the cross section I’m at because I feel like being an attorney and being familiar with the structure of deals and

helping deals, helping my client basically get financing and document their deals has been very helpful for me. And I think maybe has made me a little bit more risk averse on the investment side. I think having done the investments too, I think has made me a better attorney in terms of just having some of the more real world applications and the practical impacts of investing and documenting it on the legal side.

So that’s a lot of my origin. in terms of geographically where I am, on basically the middle of the mid-Atlantic. I’m in the eastern portion of Virginia in a city. My office is in Norfolk, but I’m from Virginia Beach, which is right next door to there. It’s a wonderful place to live, great place to raise a family. And again, I’ve been here my whole life, except when I was a

in school for law school and undergrad up in Richmond. But no, definitely love what I do and where I do it.

Quentin (05:42)
Thank you, man. Thank you for sharing the story, the journey. Thank you for letting us know where you are. Now, you’ve been at this for over 20 years. And so you know what you’re doing. You get at what you’re doing. But I kind of want to peek into you a little bit in the journey, right? And so, Mr. Richard, I have a saying where I say destiny has no wasted moments, right? Meaning no matter what we go through in life, destiny, these moments build up to where we are now. And so…

I would love to know about your journey. When did it hit you that you wanted to be in a tree? when did that, along your journey, like how did that really kind of just spark to you? Like, this is what I want to do. Is it, it helping people? Was it the, the technical part of it? Like what really in your journey made that thing stick out? Like, this is what I want to do. This is where I want to be.

Richard Crouch (Woods Rogers) (06:30)
I think in going through what a lot of students go through in college, going to career services, trying to pinpoint, what are my skills? What do I feel like I’m good at? And what could I see myself doing every day? And I didn’t initially picture myself being a litigator or standing up in court, but I liked writing.

⁓ And I liked the business side. And so I knew that I wanted to be in some type of business law. And when I started working at my firm, when I was just a young buck, I was hired to work in the business department. And the two mentors that I mentioned, the primarily focused on commercial real estate. And that was before the great financial crisis. And things were just gangbusters. People were doing syndications.

And we were, I mean, it would not be uncommon for us to close maybe four syndications a week on the borrower side. And, and people were doing portfolio deals and everything else. And I really enjoyed that. I enjoyed the type of people that I worked with. And I think what I liked the most about the type of law that I do is it’s, you’re always working towards something and you’re putting something together.

And that’s not to say there aren’t contentious moments and you still have to zealously advocate for your client and occasionally maybe write a demand letter or be firm to keep a deal moving along. But generally, both sides are generally trying to work towards the same end or objective in terms of getting a deal done while still protecting their clients. And I think that’s what I like, whereas a lot of things in the litigation world are more about breaking things down and

and tearing parties apart and it’s more of a kind of a ⁓ warfare mindset, whereas I’m much more of a facilitator and I think that’s why transactional law has suited me well.

Quentin (08:18)
Absolutely. Thank you for that. That was definitely some really, really good insight. And it’s interesting because when you talked about writing a demand letter, these are like little peaks into your world that I think we would never kind of think of. And so within the context of your world, demand letters sometimes having to be a little bit forceful, how does adversity look into your world? Could it be like people leaving out information or like how does adversity creep up sometimes?

within the legal world that you’re in.

Richard Crouch (Woods Rogers) (08:47)
It can be a number of different things. Sometimes you have another party who’s just not performing their obligations under the contract. That can be maybe a development deal where they’re supposed to get certain approvals or they’re supposed to pay certain expenses during that process. And sometimes it’s an issue of them not seeming to be terribly focused on the deal. you know, the mindset that keeps creeping in is that time kills deals.

And if we’re representing a purchaser, they will get more and more frustrated that the deal is not getting done. And sometimes that’s when you have to remind the other party, usually in writing, what their duties and obligations are and that they’re not currently complying with those. So that’s where it tends to come up the most often. I would say the other aspect that might be more adversarial would be if we represent, say, a landlord and he has a tenant.

⁓ usually be a commercial tenant where they’re just not, either they’re not paying rent or they’re not complying with their lease covenants and having to basically write a letter to get them to conform with that. then, and sometimes it cures it right away. And sometimes if things escalate, that’s usually when I, I’ll collaborate with one of my partners that litigates all the time. And, and, you know, sometimes it has to go to that next level for things to get resolved.

Quentin (10:03)
Yeah, yeah.

Well, thank you. Thank you for taking us into your world a little bit. You know, the old saying, hey, don’t make me get my lawyers involved. I’m getting the lawyers on in there. That’s what it’s all about.

Richard Crouch (Woods Rogers) (10:47)
Right.

I oftentimes tell people when we’re trying to work it out as amicably as we can, I’ll say when I exit, that’s not a good thing for you because I’m the deal maker. I’m the facilitator. But when I exit, that’s when you get the pit bull litigator in here. And pretty much the ship has sailed unless you guys settle during the course of proceedings.

Quentin (11:08)
Yeah, yeah, no, I appreciate that insight for sure. Painting that picture, I get it for sure, man. Let me ask you, what’s the next real goal for you? Like, what’s next for you? What are you looking forward to doing next?

Richard Crouch (Woods Rogers) (11:22)
I definitely, for a lot of my clients that have been good to me over the years, but who are struggling more right now, I want to continue to help them navigate and focus on the operational aspects of their business and the asset preservation. Cause I, don’t have many clients right now that are in growth mode because interest rates are where they are. they have some assets that are doing fine and they have some that are struggles. it might be something where they have to get a reserve dispersed for, you

for tenant inducement costs, tenant improvements. There might be some other default, like maybe a debt service failure to comply issues like that. But I have a lot of clients where they’d be on much more solid footing. They could either refinance or sell an asset and basically then strengthen their portfolio. I guess you could call it almost like,

know, addition through subtraction, if they can just get rid of a couple of the problem child assets, or at least improve the situation, that’s what I want to help them do. And so fortunately, they do have good documents in place of not only interfacing with the lender, but also approaching their investors about getting additional capital contributed to make certain assets more viable, so that they can have one of those capital events.

So we do have a lot of clients that are basically getting extensions with lenders in hopes that they can either sell or refinance and then get back to doing what they enjoy the most.

Quentin (12:43)
Thank you for that information. And I love the way that you are helping and serving your clients. And so I want to say this word and I want to get your thought when I say this word. What first comes to mind or what triggers for you? The word relationship. When you hear the word relationship, what comes to mind?

Richard Crouch (Woods Rogers) (12:48)
Okay.

I think a lot of it, and I like that because I think of certain clients I have that are great. Where, you know, if I had five clients, 10 clients just like you, you know, I would sleep well at night. I don’t think I’d worry about hardly a thing because there’s a history in such a strong sense of mutual respect and trust.

where you know that because not everything in the transactional world is going to be sunshine and rainbows. Not every deal goes well. I mean, we’ll certainly do our part to the best of our ability, but sometimes there are other parties that you can’t control that won’t perform that do default. But you you have certain certain clients who take that type of thing very well.

and we’ll ask you, what’s your advice? What do you suggest? And they’ll usually defer to your counsel and follow your recommendation. And there are other clients where they’ll just, if there’s anything, if there’s any hiccup or any discomfort, they’ll just see red and they won’t be receptive to any explanation or counsel or anything like that. And those individuals can be a lot more difficult.

to work with because I feel like that mutual respect and trust isn’t there. And so when I think of like, what’s a good, solid relationship and the type of relationship where you end up representing the client for decades, it’s when you have those components and they know you have their back and you know that they have yours. yeah, I can think of clients where we’ve worked together for 15 or more years and we’ve never had a crossword.

And that’s not to say we haven’t had to deal with contentious issues where maybe the client was in default under some agreement and we had to help them navigate through it, but they were just always level-headed and respectful. And ⁓ I think that’s really one of the key things for a solid relationship.

Quentin (14:49)
Yeah, I love it. mean, the way you was talking, it made me think about my marriage. Like, this is really a

marriage, right? And listen, my wife is somebody I absolutely love, but we always getting in contentious deals and transactions. It’s so…

Richard Crouch (Woods Rogers) (15:00)
you

Quentin (15:03)
So yeah, so I love it, man. So well stated, so well eloquently stated, I’m going to try this, but we’re doing good. So I want to do this. Is there any topic that I have not brought up that you would like to talk about? Or is there any other words of inspiration, education, or motivation? Like if you came in here with something on your mind that you feel like viewers needed to know, I just kind of want to open up the floor for you to make that message.

Richard Crouch (Woods Rogers) (15:07)
Yeah, yeah

Too true.

I would say just for people in the business, whether as an investor or maybe some other real estate professional, I think one of the things I’ve learned and I’ve seen it put into action by my clients is to not be afraid to make mistakes and to not be afraid to admit what you don’t know. And a lot of us just want to take it all on. And I think a lot of us view it as a weakness.

to even say, don’t know. mean, some people, some people, it’ll be clear they don’t know and they’ll double down. And, and it really doesn’t help for credibility, but, to, you know, find yourself a good mentor. If you’re kind of new to the industry, because it will help you, their perspective will help you maybe shortcut some expenses again, or expensive mistakes. You’re still going to make mistakes on your own. That’s a critical part of learning the process.

But in addition to having a mentor, just surrounding yourself with good advisors, and whether that be a CPA, whether that be an attorney, whether that be a good, maybe a good broker that helps you with your leasing situation, a good property manager if you outsource that, just surrounding yourself with good professionals really increases your bandwidth and it really strengthens your likelihood of success. So that’s.

Quentin (17:16)
Mmm.

Richard Crouch (Woods Rogers) (17:26)
That’s just the biggest and one other aspect. If people are doing things like raising money and raising equity for projects, if they are syndicators or sponsors, I think maintaining a good sense of transparency, being very honest. And I know that that goes without saying, but particularly during difficult times, because it’s how you navigate those difficult times that really impact your long term.

reputation and if you do have a goal to be doing this long term, your reputation becomes your currency.

And so if you’re managing other people’s money or using other people’s money to money for deals, it’s just very important to always communicate with them. Fully disclose with them all the fees on the front end that you plan on charging so that you don’t have to explain things later. So it’s all very clear and upfront and ⁓

Even if your documents say something like you’re not liable for their loss of their investment, if things are not going well, act like you are because it’ll basically show them how responsible and just invested in this journey you are with them. And it will really increase your credibility than if you were to just simply play ostrich and stick your head in the sand and ghost them on returning their calls and things like that.

So those are just some of the things that I’ve seen certain clients who have put those into practice and certain ones that haven’t. And the ones that have just always been above board and follow those principles have, it’s definitely served them better in the long run.