Colliers has agreed to acquire a controlling stake in a property management firm whose portfolio stretches across the U.S. as the brokerage works to grow business lines that create recurring revenue.
The Toronto-based firm said it would add Phoenix-based Arcadia Management Group, a company that manages more than 60 million square feet of office, retail and industrial space in 24 states, with a focus in the Southwest. Colliers said Arcadia would be rebranded as Colliers as soon as the transaction closed.
By Thursday morning, Arcadia's homepage stated in large font that "Arcadia has joined Colliers."
Terms of the deal were not disclosed, but Colliers said Arcadia's senior leadership would retain a direct equity stake in the business and oversee the line's operation under Colliers' partnership model.
Colliers' investment in Arcadia positions the firm as a major player in property management in the fast-growing Southwest, Karen Whitt, president of real estate management services of Colliers U.S., said in a statement.
Colliers' agreement comes as brokerage firms move to expand the professional services they offer beyond assistance with transactions in an attempt to grow revenue and deepen relationships with clients. Earlier this week, Colliers completed its acquisition of a 75% stake in Versus Capital, a Denver-based alternative real asset management firm with more than $6 billion of assets under management.
The deal also comes as the often behind-the-scenes property management function grows in importance due to the role it plays in helping keep office, retail and other property types open and available during global health crises such as the COVID-19 pandemic. In August, Avison Young agreed to acquire Madison Marquette’s office and industrial property management, agency leasing and project management service lines as it works to grow its presence in those businesses.
Arcadia has been working to expand its presence in the Southwest.
Last month, Arcadia expanded its push into Texas and promoted Sara Pilar to regional director of property management. In her new role, Pilar oversees day-to-day management operations for Arcadia-managed properties across Texas. The firm said Pilar, who relocated to Austin, Texas, would work in tandem with Joe Ford, Arcadia's president of Texas operations.
The partnership with Colliers, a brokerage with a large national and global presence, would better position Arcadia to meet its clients' needs, said Gary Shaw, who served as Arcadia's president and is set to become regional managing director and partner of Colliers real estate management services in Arizona, Utah and Austin.
Founded in Phoenix in 1986, Arcadia has 150 employees who provide property management, property accounting services and project management.