Sule Aygoren Carranza is managing editor of Real Estate Forum and editor of Multi Housing forum, from which this article is excerpted.

Irvine, CA—Locally based brokerage firm Sperry Van Ness has made huge leaps in its growth strategy. The company has not only expanded in both the US and abroad, but has also increased its business focus by acquiring a high-end institutional brokerage firm, JBM Realty Advisors Inc. of Tampa, FL.

All of this, say executives, will help the firm do even more business, particularly in multifamily. Today, the sector accounts for 30% to 40% of the company's transaction volume.

To spearhead its expansion, the company tapped Jerry Anderson to serve as president of Sperry Van Ness International. The 30-year industry veteran has acted as president of SVN's national advisor organization since 2004. He played a significant role in the company's national growth, taking it from 350 advisors to 900 today.

This, says Anderson, "is just another continued wave of expansion for SVN." It started as a Southern California-focused regional firm 20 years ago and began expanding nationally six years ago, opening a dozen new offices in the first year alone. That growth was client-driven, he says, explaining, "A lot of the clients that SVN was working with wanted to invest outside of Southern California, but at that time, we didn't have any agents outside of the region.

"What's driving our expansion now is that for the last 20 years, we've done a terrific job of working with high-net worth individuals--that's been our sweet spot. In addition to high-net worth individuals, a lot of our properties are being looked at by institutional investors. That arena is not one that SVN has played in on a consistent basis. It just hasn't been a strategic focus for us."

The terms of the merger were not disclosed, and JBM's management will essentially remain the same. JBMRA-Sperry Van Ness Institutional will function as the exclusive institutional division of SVN, boosting the firm's presence in that arena. "JBM has been focused 100% on the institutional multifamily arena for about eight years now, so acquiring them gives us a very solid foundation," he says. "And JBM already has the marketing, analysts and underwriting capabilities that's required at the institutional level."

The merger will also expand JBM's capabilities, he adds, since it can now tap into SVN's national advisor network. Because JBM focuses on portfolios and has an average deal size of $31 million--it has closed in excess of $4 billion since its inception in 1999--Anderson expects SVN to do larger deals than in the past. The first two deals JBM sourced while part of SVN, he reveals, were $100-million and $67-million portfolios.

Another benefit of the merger for SVN is an increased presence in Florida. "JBM is very dominant in Florida multifamily, while SVN is very dominant in multifamily on the other coast, in Southern California," says Anderson. "SVN is now squarely in business in the state of Florida."

SVN has also opened new offices in both the US--in Chicago, New York City, Denver, Seattle and the Puget Sound area of Washington State--and abroad. Globally, it's doing business in Costa Rica and Panama, and plans on venturing into other countries as well.

The global business, Anderson says, was spurred by the firm's ethnically diverse advisors. "They wanted to be able to give folks in their home countries access to properties in the US," he says. "We, in turn, brought in companies from different countries, made them part of out network, so their clients could have access to properties that we're marketing. And, of course, multifamily is a product that a lot of foreign investors like to consider."

The shift in the capital markets has shaken up the playing field of the apartment investment market, Anderson states. "Now it's real sellers, real buyers and real money," he explains. "'Real sellers' are more in tune with what buyers are willing to pay. What I mean by 'real buyers' is that we no longer have 10 or 12 players chase after an apartment complex sight unseen. The dollars are still chasing product, but the investors that are active are doing a better job of doing due diligence than in the past. They're not feeling they have to rush in to buy it because someone else is going to throw money at it in a deal that doesn't make any sense. And the third part--'real money'--means that all the buyers coming to the table these days have to put up more equity than in the past."

Despite the changes, he still expects SVN to grow at the same pace it's been growing or even faster. For instance, five years ago, the firm closed $2 billion in deals. It expects to end this year with nearly $13 billion in gross sales, across all property types.

Anderson says he would like SVN, currently the 16th largest commercial real estate brokerage firm, to climb up the ranks of the industry. "By steadfastly adhering to the unique principles on which this company was built, we'll successfully grow into additional major markets throughout the US, expanding internationally and further penetrating the institutional markets," he says. "Through these endeavors, we are highly confident that we will become one of the top 10 commercial real estate brokerage firms within the next 24 to 36 months."

Instant Insights /

SVN Grows Institutional Capability

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