MIAMI-Locally based Holly Real Estate has scaled back its five-office Southeast operation to three offices. The Jacksonville Business Journal broke news of the firm closing its Jacksonville and Macon, GA locations before the commercial real estate firm could issue its official statement, William Holly, chairman and CEO of Holly Real Estate, tells GlobeSt.com.

"Both locations were the smallest offices with the least amount of employees," Holly explains. "They were brokerage-only offices," unlike its remaining Miami corporate headquarters, Tampa and Atlanta locations, which handle investments, joint ventures, development, property management and consulting, as well as brokerage services. Holly says the firm will continue to do work out of both Jacksonville and Macon through its Atlanta and Tampa locations, which are now regional offices.

The plan to regionalize is part of the firm's strategy in dealing with the overall real estate downturn. "We needed to make sure we remain as profitable as possible and focus on our biggest markets," Holly says. "In the last couple of months, we have had to look in focusing on where our revenue was coming from and we found a few of the offices were luxuries." The Macon office's business is easily run out of the Atlanta location, just one hour north, he says.

Brokers in Jacksonville say it is no surprise that the firm decided to close its local office, warning that it will not be the last commercial real estate office to shut its doors because of the slowed market there. "Since summer 2008, it's like somebody turned the lights off," Hobart Joost Jr., senior vice president with Colliers Dickinson, tells GlobeSt.com. "We've had deals terminating because of lack of financing. We're still seeing smaller deals, but the market is nowhere near where it was in 2007, and going forward the pipeline does not look good."

Joost says there is also talk of another smaller franchise brokerage firm closing, adding that even the most competitive firms are downsizing and cutting expenses. "It's all reflective of the market and what's happening nationally," he adds.

Holly Real Estate has also made adjustments to its overall strategy, focusing on sector-specific funds of about $25 million each. The firm plans to close its first deal in Tampa through its medical fund within the next 60 days, and a diversified fund will close on a deal in the next 90 days, reveals Holly. The company's third fund, which is targeting distressed industrial properties, is in the fundraising stage.