STEPHEN BLEVIT
ALSTON & BIRD LLP, Partner
Stephen Blevit, who joined the downtown office of Alston & Bird as a partner this year, wrote the book on single-family rental financing and securitization.
It wasn’t actually a book, but Blevit did develop the documentation widely used for those transactions as part of his work in structured finance. His deals, which include a wide variety of clients, have earned industry recognition.
Blevit previously worked for the late Eli Broad, handling mergers and acquisitions and corporate development for SunAmerica Inc.
How did you discover your interest in law? And how did you arrive at your specialty?
Throughout my career I’ve worked on a mix of corporate and debt-finance transactions. Over the years, I gravitated towards working less on straight corporate transactions and more on increasingly complex finance transactions. Complex finance transactions allowed me to be more creative rather than following “market” terms that often dictate the results of corporate transactions. Moreover, I see complex finance transactions as like a puzzle that I enjoy solving.
When the Great Recession hit, I found myself working on new transactions that involved financing challenging single-family residential real estate assets such as non-performing residential mortgage loans, foreclosed homes and installment sales contracts.
By 2012, I became known for my work involving the financing of single-family residential assets. That’s when I received a call from several bankers at Deutsche Bank who were referred to me because of my experience in financing pools of foreclosed homes. Deutsche Bank was looking to put together the first Wall Street financing for single-family rental homes with institutional ownership. At that time, several large investment firms (and many smaller investors) were buying foreclosed homes, renovating them and turning them into rentals. I discussed with the bankers at Deutsche Bank how I would structure the transaction and they hired me to handle it.
You rarely recognize the pivotal moments of your life until years after they happen. I had a sense at the time that this was something that could be big. But I had no idea at that time that I was helping to lay the groundwork for a new industry. The next year my colleagues and I put together the first securitization of single-family rental debt for a single borrower. The following year we put together the first securitization of single-family rental debt for multiple borrowers. These new types of financing arrangements helped to enable the creation of a new industry that previously was solely the domain of mom-and-pop investors. We kept innovating from there. The financing structures and documentation we created in 2012 through 2015 are today used throughout the industry. What started off as one $300 million warehouse loan grew to over $100B of transactions in about a decade.
Tell us about the most noteworthy or interesting case (or cases) that you’ve been involved with.
While I’ve handled several innovative transactions in the single-family rental space, some of which have won awards as deal of the year, I’m most proud of the Zillow 2021-1 and 2021-2 securitizations I handled. At that time Zillow operated an iBuyer business, which is essentially a business that buys and sells thousands of single-family homes a year. Zillow hired me and my colleague to put together the first securitization of iBuyer debt. While I had worked on several debt financings for iBuyer businesses, the proposed securitization was rather novel. I had an idea of how it would work, but I needed to work through some tax and practical issues. When the plan crystalized in my head, I sat down in front of my computer with a blank sheet of paper to write the term sheet. The final transaction structure wound up looking about 95% similar to my first draft of the term sheet.
How did the pandemic affect your career, and what do you think is on the horizon for the legal industry?
My practice area has been continually growing over the last 11 years. The pandemic caused an unusual amount of volatility in the capital markets, which continues to this day. But I’m encouraged by the resiliency in the practice and tremendous interest in the industry in spite of these challenges. We’re already planning for the next wave when markets normalize.
