As the commercial real estate-brokerage industry marches toward consolidation, Denver-based Fuller Real Estate has become the latest to look to a national company to broaden its business.
Over the past few years, big companies have been getting bigger, leaving smaller, independent brokerages — and their brokers — struggling to compete. In 2006, CB Richard Ellis Group Inc., the world’s largest commercial real estate-services company, paid $1.79 billion for rival Trammell Crow Co.; and in 2008, Jones Lang LaSalle bought The Staubach Co. for $613 million.
Recognizing the trend, Fuller is teaming up with Cassidy Turley, a St. Louis-based real-estate-services provider that manages 420 million square feet of space through its 61 offices in 29 markets. After 55 years as Fuller Real Estate, the company now will be known as Cassidy Turley Fuller Real Estate and will be part of the fourth-largest real estate firm in the country and the largest that is privately held.
“We have to supply brokers with all the tools and best practices to compete,” said Greg Morris, the company’s president and chief executive. “You’ve got to get big or you’re going to die. You need to grow and expand your resources.”
As a result of its affiliation with Cassidy Turley, Fuller’s clients now have access to brokers and employees who provide an array of services on a national and global level, leaders from both companies said.
“We take strong local firms, add more services and grow the business on a national basis,” said Mark Burkhart, chief executive of Cassidy Turley.
Fuller isn’t alone in its quest to compete against big companies like CB Rich ard Ellis and Jones Lang LaSalle. At least two other independent Denver brokerages are considering affiliating with a network but haven’t made any decisions yet.
“The networks have really had mixed results,” said Evan Kline, managing broker at Shames Makovsky Realty Co. “They’ve had difficulty competing with the big national firms, but the business has changed dramatically and there is more emphasis on the ability to service clients in different markets. We’re looking at our options and considering affiliations, but I don’t think you necessarily have to.”
Frederick Ross, which has been considering its options for several years, is widely believed to be in talks with Newmark Knight Frank, a global real estate consultancy with more than 200 offices on six continents.
Rich McClintock, executive vice president of the Denver-based brokerage, declined to disclose whom Frederick Ross is in discussions with, but said remaining independent and aligning with a national organization may be attractive.
“I think, for a variety of reasons, the best of both worlds is to be locally owned, serve your regional market and then have a national affiliation,” he said. “Being a part of a public company, where the alignment isn’t necessarily appropriate between management and brokers, has its ups and downs. But a powerful local company with a national affiliation is something we’re definitely exploring.”
But Frederick Ross didn’t act fast enough to retain one of its top brokers, who left two months ago taking his three-member team with him.
Scott Garel, now a senior vice president at Grubb & Ellis Co., said as the industry has moved toward a global platform, he became frustrated that Frederick Ross didn’t get on board faster.
“It’s really challenging for a local regional firm to compete with the nationals,” Garel said. “You’re not carrying similar cards as your compatriots in other cities. It’s really challenging to prove to clients that you all work under the same guidelines and business strategies.”
Over the years, Frederick Ross has made its fair share of acquisitions to stay competitive, said Byron Koste, executive director emeritus of the University of Colorado Real Estate Center.
“You need critical mass in order to be competitive,” he said. “Frederick Ross has to figure out what their niche is or morph and become something huge. I’m hoping some of the folks can hang on and find the right niche.”
Margaret Jackson: 303-954-1473 or mjackson@denverpost.com
