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San Diego
Saturday, May 18, 2024
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Firm Wants to Change Real Estate Landscape

Toronto-based commercial real estate services firm Avison Young is rapidly growing its own U.S. office footprint, most recently entering a competitive San Diego market already filled with several established regional and national brokerage players.

Chairman and CEO Mark Rose said the 35-year-old company, Canada’s largest independently owned commercial real estate firm, is looking not only to capitalize on an improving market, but shift the ways in which brokerage talent is recruited and retained, using a model akin to a law firm.

Rose said the firm’s principals — its “producers” — are brought in similar to the way in which attorneys join a firm as partners, sharing in the organization’s local growth rather than having the benefits of their efforts disbursed to outside shareholders or investors.

“The great thing about not being a public company is that you don’t have to be so worried about quarterly earnings,” said Rose, who joined Avison Young in 2008 following prior stints as CEO of Grubb & Ellis Co., as well as COO and CFO in the Americas division of Jones Lang LaSalle — both of those public companies.

Growth Strategy

“We are going to be focused and committed for the long term to growing all of the new offices we’ve opened,” Rose said.

The company recently opened its first San Diego office at 4225 Executive Square in University Towne Centre, a neighborhood that has long been the local corporate home to large regional, national and global brokerage firms serving the region. Those players include Cushman & Wakefield, CBRE, Cassidy Turley San Diego, Marcus & Millichap, Colliers International and JLL, along with the downtown-based Hughes Marino Inc.

The local market, like those of other big U.S. metro regions, has seen significant economy-related upheaval over the past five years, including acquisitions, downsizings, leadership changes, affiliation switches and defections of brokers from one firm to another.

According to the research firm IBISWorld Inc., the nation’s real estate sales and brokerage industry is well on its way to health after years of decline spurred by the subprime mortgage crisis, the Great Recession and lingering credit crunch.

Improving Market

Revenue from U.S. commercial and residential transactions is expected to reach $103.5 billion this year, marking a full recovery from losses incurred since 2008, though still short of the pre-recession peak of $163.5 billion seen in 2005.

The San Diego office is the 22nd outside Canada for Avison Young and its sixth in Southern California. The company, which does not divulge financial information, in the past four years has grown from a total of 11 offices to 44 locations in 36 Canadian and U.S. markets, employing more than 1,200 real estate professionals.

The San Diego debut followed Avison Young’s move to acquire two commercial brokerage firms in the Los Angeles area since 2011. The local office is being overseen by Principal Jerry Keeney, a former managing director with Cassidy Turley San Diego.

Recruitment Effort

Keeney said the firm has not set a staff size goal or hiring timetable for its ongoing local service ramp-up, but he will be working with other regional and national Avison Young executives to recruit brokers and support staff. “We’re going to be looking for people with deep relationships and a record of success in this market,” he said.

Keeney’s own real estate experience over the past 25 years includes work in the local life sciences and technology sectors, and he said the region’s high proportion of small to midsized companies should sync well with Avison Young’s own entrepreneurial approach to business operations and client representation.

The company is particularly looking to serve local firms that increasingly interact with the creative, technology and science industries, such as financial service providers and intellectual property law firms, Keeney said.

Rose, who is also a real estate industry veteran of nearly three decades, said Avison Young is a full-service company that represents building occupiers, owners and investors across all the major sectors, including office, industrial, retail and multifamily.

While Avison Young has long-term plans to also expand in Europe and Asia, he said the biggest hurdle facing commercial real estate service providers is the degree of uncertainty that businesses still have about the future, despite steady recovery in the overall U.S. economy.

He said San Diego and national demand for services should be increasing as companies have a clearer indication of how government budget cutting and business regulatory policies, and ultimately consumer confidence, impact their operations and long-term space needs.

“The problem we’ve had is that lots of business decision makers have had their finger on the pause button for the past few years,” Rose said.

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