Pending Launch of Cassidy-Turley Leaving Competitors With More Markets to Backfill
Details continued to emerge this week about two of the most significant changes to the commercial real estate brokerage landscape since 2008, the rebranding and uniting of Colliers International and FirstService Real Estate Advisors (REA) and the impending launch of Cassidy Turley, a new national company formed by eight breakaway affiliates from Colliers, Grubb & Ellis and NAI Global.
As reported by CoStar last week,
Colliers and FirstService announced they will unite their U.S. and global operations under one platform, doing business as Colliers International with more than 15,000 employees in 480 offices in 61 countries.
Leaving the Colliers fold -- there is dispute about which side terminated the affiliation -- are Cassidy & Pinkard Colliers in Washington, D.C.; Colliers Turley Martin Tucker based in St. Louis, Colliers ABR in New York City; Colliers Pinkard in Baltimore, Charlotte and Raleigh,; and Colliers Houston & Co. of New Jersey. Those entities -- plus NAI affiliate BT Commercial in San Francisco, and Grubb & Ellis BRE Commercial shops in San Diego and Phoenix -- are forming Cassidy Turley, which formally announced Monday it will launch its new logo, Web site and business structure on March 1. Cassidy Turley will be a national company of 900 brokers, including 360 shareholders, at 57 offices across the U.S.
On Wednesday, Santa Clara, CA based CPS CORFAC International announced it will also join forces with Cassidy Turley, becoming Cassidy Turley CPS.
The first in an expected wave of annoucements by Colliers International affiliates in support of the rebranded company began in local markets this week. Colliers says it's now the third-largest real estate services firm in the world behind CB Richard Ellis and Jones Lang LaSalle. South Florida market leader Colliers Abood Wood-Fay and Clearwater, FL-based Colliers Arnold, announced publicly they will stay on as Colliers affiliates and rebrand as Colliers International.
Colliers, Grubb & Ellis and NAI Global are already working to sign new affiliates in the markets where firms are departing and joining Cassidy Turley.
"In every market, we have a minimum of three interested parties, and we will be making announcements in the very near future in many of those markets," Douglas P. Frye, chairman and CEO of Colliers International, tells CoStar Advisor. "Some will be affiliates and some will involve mergers or equity."
In Phoenix, BRE Commercial will shed its affiliation with Santa Ana, CA-based Grubb & Ellis and become Cassidy Turley in an office headed by president and managing principal Bryon Carney. In San Diego, BRE Commercial's five Grubb & Ellis offices are also joining Cassidy Turley.
Grubb & Ellis, meanwhile, is "actively recruiting leadership" in Phoenix and San Diego and will open locally owned offices in both markets, said Greg Coxon, president, transaction services, for the Grubb & Ellis western region, in a statement to CoStar.
"These are both large and strategic markets and opening owned offices is in the best interest of our clients, our firm and its professionals," Coxon said. "There is a strong list of brokerage professionals who have reached out to me inquiring about our plans. We already have in place successful property management businesses in both markets and our goal is to have fully integrated, full-serviced operations in Phoenix and San Diego up and running soon."
In San Francisco, BT Commercial announced it is leaving NAI Global to join Cassidy Turley. BT Commercial has more than 15 offices and 350 professionals in Northern California and has completed $45 billion in transactions over 28 years. CEO Mike Kamm will join the new firm's executive leadership team.
For its part, NAI Global "has already begun to receive inquiries from the [Northern California] market and are beginning to evaluate our opportunities," NAI Global President and CEO Jeffrey M. Finn tells CoStar Advisor. "We will be back in the market at the earliest opportunity."
As with previous mergers, rebrandings and consolidations that have swept the brokerage world, firms and their dislocated affiliates will likely face some temporary confusion in the marketplace as the industry tries to take stock of the changes to company nameplates.
Previous integrations include the 2008 marriage between Staubach Co. and Jones Lang LaSalle, the 2007 merger between Grubb & Ellis and NNN Realty Advisors and the 2006 combining of Trammell Crow and CB Richard Ellis.
"In the beginning, there's always some confusion in understanding who's on first and who's on which team," NAI's Finn said. "Whenever you go through a rebranding process, it takes time to educate and let the market know who you are and what you stand for; how you differentiate, and what your strategy is to add value."
Adding to that confusion may be the sometimes-subtle differences as to what differentiates a national real estate company from a traditional network of independently owned and operated brokerages, or the newer brokerage model based on ownership by shareholders or operating partnerships.
The partnership model in the Colliers/FirstService rebranding is an attempt to gain the best of both worlds - an entrepreneurial, locally grounded company combined with the strength, reach, accountability and versatility of a global firm. FirstService REA, formed by property services firm FirstService Corp. in 2004 after buying Colliers International's largest affiliate, now owns about 70% of Colliers International globally and retains worldwide rights to the Colliers name. The remainder of equity in Colliers is retained by local market partners.
In addition to its owned offices, Colliers International still has vestiges of its traditional network roots, continuing to effectively license its name in many U.S. markets, including the aforementioned Colliers Abood Wood-Fay, and Colliers Arnold.
"We believe totally in the Colliers brand and we know what Colliers means globally, and this is important for us because Miami is an international city " said Michael T. Fay, president of Colliers Abood Wood-Fay, which bought its offices from Colliers four years ago.
"When FirstService got control of the Colliers brand and laid out their vision to brand and grow it through their corporate services platform and property management platform and their total control of the brand globally, we said this is what we want to be a part of."
Also, FirstService's business model is to acquire a percentage in each one of the local market offices, giving affiliates not only access to a global platform, but also the potential to sell an equity stake to the home company, Fay said.
"We're clearly not selling our firm right now, but their model is that they'll buy 60%-80% and leave local operators to run the business. For us, that's an enticing business model, whether it happens this year, next year or three to five years down the road." Fay said.