MINNEAPOLIS—Cushman & Wakefield/NorthMarq, through its holding company NorthMarq Companies, has just acquired Commerce Real Estate Solutions, an independently owned and operated Cushman & Wakefield Alliance firm based in Salt Lake City. The new entity has nearly 750 employees. The acquisition closed Dec. 31, 2013. Terms of the transaction were not disclosed.
“The primary opportunity [here] is to grow,” says Jeff Eaton, the president of CWN. “The combined revenue is over $100 million and we collectively manage over 50 million-square-feet of space.” Furthermore, it’s an opportunity “to bring our best practices to all of the markets.”
CWN is based in Minneapolis/St. Paul and Commerce, which provides brokerage and advisory services for landlords and tenants, has offices in Salt Lake City, Ogden, Park City, Provo, and St. George, UT; Las Vegas and Reno, NV; Seattle and Bellevue, WA; and Boise, ID. Commerce has about 250 employees, 160 of whom are licensed brokers.
CWN and Commerce each have different strengths that officials hope will complement one another. CWN is “the perfect vehicle for the markets where we have a strong brokerage operation,” says Mike Lawson, president of Commerce, but few other services like management. The firm does manage about 7 million-square-feet, but primarily in Salt Lake City.
As for CWN, which manages about 42-million-square-feet of retail, industrial and office space, the acquisition will triple its total number of brokers to about 240. “What you have immediately is a potentially larger number of clients across the platform,” says Eaton. And “we’re already operating property management in many markets so we have the capacity and systems to easily go into [new ones].” The firm also does leasing, sales, lease administration, project management, transaction management and facility management.
Eaton says that the acquisition is more of a long-term strategic move, rather than a simple attempt to expand into the western states. In 2009, for example, NorthMarq bought Opus Property Services LLC, bringing it into about 20 new markets, and in 2011 it formed the joint venture with Cushman & Wakefield. “This allows us to continue down that path.”
Still, it won’t hurt that the new entity has a lot of operational capacity in markets that have begun to show real strength. The Urban Land Institute recently published its Emerging Trends in Real Estate 2014, and found that Minneapolis ranked 20th overall among US metropolitan areas in overall real estate prospects. Furthermore, Salt Lake City ranked 18th and Seattle came in 6th.
Both Eaton and Lawson say relationships built up over the years between the two groups should ease the transition. “We’ve known Mike and his leadership team for years,” according to Eaton, even before the formation of the joint venture with Cushman & Wakefield. “We have a lot of trust and mutual admiration.” And Lawson says “it’s more of a marriage.”
The firms will begin to leverage the combined service platform in early 2014, which will allow managers to better prioritize resources. Each firm, however, will maintain independent operations and brands in their respective markets and within the global C&W platform.
Lawson and Commerce executives Bill D’Evelyn and Rodney Gibson will join a newly formed executive committee that will set the strategic course for both companies. That committee, led by Jeff Eaton, will also include Mike Ohmes, Lisa Dongoske and Clint Miller from CWN.