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Alston & Bird has lost its lucrative 10-lawyer real estate investment trust group in Raleigh, N.C., to rapidly expanding legal behemoth DLA Piper Rudnick Gray Cary. Brad S. Markoff, the group’s leader, said he left Alston for the same reason he joined the firm almost eight years ago: a bigger platform. He’s taking his real estate investment trust (REIT) group, one of the largest in the country, to 2,800-lawyer DLA Piper, he said, because of the firm’s strong real estate practice. DLA Piper is using the acquisition to open a Raleigh office with Markoff as the managing partner. William R. Klapp Jr., Robert H. Bergdolt, Jeffrey M. Sullivan and Jeffrey D. Miller also join as partners. Bradford R. Lenox and Christine C. Lehr join as of counsel. The group also includes three associates. In 1997, Markoff joined Alston & Bird from North Carolina firm Smith Helms Mulliss & Moore because, he said, Alston’s national real estate practice provided his REIT team a great opportunity for expansion. Now, he said, DLA Piper can help his group grow internationally. The January merger between London-based DLA and, in the United States, Piper Rudnick and Gray Cary Ware & Freidenrich created a firm with 200 real estate lawyers in the United States and another 250 internationally. The merger gives Markoff’s team access to Asia and Europe. Markoff said the biggest REIT transactions last year were in Asia, and he foresees a similar boom in Europe. He explained that European nations are adopting legislation that will securitize real estate assets, which will lead to more REIT transactions. Similar laws already exist in the United States. Markoff also was attracted by DLA Piper’s strong technology practice, centered on predecessor firm Gray Cary’s strongholds in San Diego and Palo Alto, Calif. His group does a lot of work with the many technology companies in Research Triangle Park, N.C., and can gain from cross-pollination with the California lawyers, he said. Markoff said he’s been approached by a lot of firms over the last year, since REITs have been the only consistently strong capital market in the past few years. Of those firms, DLA Piper offered the most extensive national and international coverage. “You always want to know: If given the platform, what can you do?” he said, adding that he felt he had to give it a shot. “Alston can do transactions anywhere and everywhere, but [at DLA Piper] we have people local to those markets who know the players,” he said, and who know “who to pick up the phone and call” for a potential joint venture or other deal. Markoff said a significant number of the group’s clients will follow it to DLA Piper, but he declined to name them. He confirmed that longtime client Highwoods Properties, a Raleigh REIT, remained with the group. Recent clients include Capital Lease Funding (New York), Wells Real Estate Funds (Atlanta), Duke Realty Corp. (Indianapolis) and Ashford Hospitality Trust (Dallas). The addition of Markoff’s team was a major impetus for the creation of a multidisciplinary real estate capital markets group, said Jay A. Epstien, DLA Piper’s real estate practice leader, who called it the logical next step after beefing up the firm’s real estate group. The firm’s existing REIT work is centered in Chicago, Baltimore, New York and, to a lesser extent, Los Angeles, Epstien said. The firm plans to add technology lawyers and litigators to the Raleigh office. Alston & Bird managing partner Ben F. Johnson III said the firm’s Raleigh office remains viable, with 10 lawyers and four nonlawyer patent agents. The office’s focus is pure patent law, he said. The firm continues to have a “very strong REIT practice,” he said, with the lawyers in that practice located primarily in Atlanta and Washington. James E. Croker Jr. in the firm’s Washington office leads the practice, and clients include AIMCO, Duke Realty and HomeBanc Mortgage Corp. Johnson conceded that Markoff took some clients with him. Johnson added that the Markoff group, over the past three years, accounted for about 1 percent of the firm’s gross receipts and less than half of the receipts for the Raleigh office. “One cannot argue with the proposition that 2,800 lawyers in 50 offices is more than 700 lawyers in 5 offices,” Johnson said in an e-mail to the Daily Report. “The DLA Piper and the Alston & Bird business models are very different. We believe ours is best for us. For the sake of our departed partners, we hope that Brad Markoff’s ‘hope’ that ‘DLA Piper’s extensive national and international coverage will allow his group to do more deals in Europe and Asia’ proves to be the case.”

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