Colliers is positioned to overcome high interest rates and other economic challenges to expand in the United States by beefing up teams in some major cities, its United States CEO said.
The Toronto-based firm will enter new U.S. markets, buy more of its affiliates and recruit more experienced talent, Gil Borok, CEO of Colliers in the United States and Latin America, said in an interview with CoStar News. For example, Borok said, Colliers this week expanded its brokerage operation to Louisiana and hired veteran New Orleans-area broker Chris Abadie as a senior vice president to lead its office and expansion efforts across that state.
"It's a good thing that we're able to do it, and that goes to our strong balance sheet in the size and scale of Colliers," Borok said. "So we can do it when the opportunity presents, regardless of the macroeconomic environment," and "it's not as much about now as it is much about our strategy that has been one of growth in the U.S. for a number of years, and in particular, the last four or five years."
Colliers, set to report its first-quarter earnings May 2, said it expects to see its brokerage operation, the largest part of its business, rebound this year after a dicey 2023. In February, Colliers executives said they expect revenue to rise as much as 10% in 2024 as deals pick up after years of slowed commercial real estate demand caused by economic uncertainty and the pandemic. With that, the firm is ready to expand, Borok said.
"We have a mindset of growth and a mindset of filling gaps," he said. He added that being large, but not as big as rival firms CBRE, Cushman & Wakefield and JLL, lets Colliers be nimble when expanding.
"There's a lot of things that differentiate us, including size, and bigger isn't always better, but growing strategically and filling gaps is easier for us to do because we're smaller and we've got that mindset." he said. "So this is just another example of taking advantage of where we sit vis-a-vis the platform players."
Louisiana Offers Opportunity
Colliers, Borok said, had been active in the New Orleans market in an advisory capacity but could not conduct transactions itself without having a licensed broker in Louisiana. Hiring Abadie "gives us the ability to take that consulting behavior, a little consulting relationship, and actually execute on it."
Louisiana offers Colliers the opportunity to expand its business with several property types, Borok said.
"Retail and hospitality, hotels, are a big product in New Orleans in that part of the world, catering to the tourists, catering for people who come in to have a good time in New Orleans," Borok said. "And then when you go a little bit deeper, then really multifamily is a pretty big category in New Orleans, again, because you've got a limited space and a lot of people who live there. Then last but not least, I would call out industrial. More and more there, industrial is a food group that is growing there."
Borok said the planned expansion of the Port of New Orleans will probably create new demand for industrial property in the region. In December, Port NOLA acquired property in St. Bernard Parish and began a two-year due diligence and permitting period for a potential new container terminal.
"That might bring a whole series of opportunity as the port opens, similar to some of the larger port locations like Los Angeles that we haven't seen in New Orleans to the extent I think we're going to see it," he said.
Fight for Talent
As Colliers looks to grow further this year, it may look at its partners and existing offices for opportunities, Borok said.
"The history of Colliers in the U.S. is that it was largely an affiliate operation, sharing a common brand," he said. "Over time, we've acquired a number of those affiliates, including Philadelphia. We do have some opportunities to acquire affiliates in larger markets. There's still a few of those."
However, he said he expects additional growth to come in the form of adding to existing teams in larger markets.
"I think more of our expansion will come from investing in food groups, if you will, office, industrial retail, multifamily and alternatives, where we are weaker or where we don't have a presence in the markets that we're in," he said. "We don't have multiple teams doing office agency in Chicago, for example. Our competitors probably have four or five teams. It'll be more about building out those platforms."
As Colliers recruits experienced brokers, Borok said he knows it won't be easy.
"There is fierce competition for top talent. It's a limited resource," he said. "And so while we've done well ... our net recruiting of producers has been around 100 plus in the last three, four years, which is really a great milestone for us, we've lost a few people here and there. Not a lot, thankfully, because I think the culture creates a stickiness and the empowerment creates a stickiness."