LOS ANGELES-Grubb & Ellis Co. has launched a major expansion into the appraisal business, naming former CB Richard Ellis appraisal chief Douglas Haney to spearhead the opening of up to 10 new offices and 100 new hires nationally by the end of the year. GlobeSt.com has learned exclusively that the company, which will operate the business as Grubb & Ellis Landauer Appraisal & Valuation, will announce today that the new division will have a presence in every key market by year-end. Along with Haney, who most recently was with IDS Real Estate in Los Angeles and who will be president of Grubb & Ellis Landauer, the Santa Ana-based company has hired Eduardo Alegre, formerly a principal at Playa Capistrano Enterprises, as executive managing director to be based in Newport Beach.

Grubb & Ellis CEO Tom D'Arcy tells GlobeSt.com that the company believes that "the demand for appraisal services is going to be very significant over the next few years" and that the appraisal business "is well within our core competency." Grubb & Ellis acquired Landauer & Associates in 1999 and historically has offered appraisal services in limited markets. The Landauer name is highly regarded in the appraisal industry, according to D'Arcy, hence the name of the new company.

In addition to the Landauer name, Grubb & Ellis gains immediate recognition in the appraisal community with the hiring of industry veterans Haney and Alegre, according to Jack Van Berkel, chief operating officer and president of real estate services for Grubb & Ellis. With the hiring of Haney, he says, "We have probably the best-known appraisal leader in the country. Every senior level appraiser will know who he is."

D'Arcy and Van Berkel both point out that the formation of Grubb & Ellis Landauer is part of a larger strategy designed to expand the company's platform into new lines of service. "This is consistent with the strategy that we've laid out as a company," D'Arcy says. He points out that the company recently raised $30 million in a debt offering earmarked to fund such expansion, including the firm's recently announced expansion into mortgage banking with the hiring of Jeff Majewski, formerly COO of CBRE's debt and equity finance group, as executive managing director to direct the Grubb & Ellis commercial mortgage brokerage practice.

Van Berkel points out that Grubb & Ellis has hired approximately 150 new brokers in the past year as part of a plan to bring on bigger producers and has been planning the appraisal business expansion for quite some time. "As we continue to build our platform, this is a big piece of that puzzle," he says.

Haney tells GlobeSt.com that demand for appraisal services is already growing in the "repricing of the marketplace" that is occurring and that appraisers will play a big role as the repricing continues. "Valuations are needed on almost every property where there is debt involved for an acquisition or disposition" as well as for the huge volume of CMBS loans that are coming due and will be evaluated under different underwriting standards from those that were in place when the loans were originally funded, he explains. As an example of changes in loan underwriting standards, he points out that buyers today get credit for income in place at their properties, but not for anticipated future increases in income, as was the case when the market was booming.

The client base for Grubb & Ellis Landauer will include financial institutions, special servicers, insurance firms , new CMBS issuers and firms needing litigation support, as well as a host of governmental entities and agencies including cities, counties, states and the federal government, Haney says. He points out that all of these clients need appraisal services to some extent, in both good times and bad, but the current market has greatly increased the demand among financial institutions and special servicers.

Haney, at IDS, advised the firm’s investment committee on feasibility, equity, debt and strategic valuation assignments. He spent the previous 34 years as a member of CBRE's appraisal business, where he was president of the firm’s valuation and advisory services division and member of CBRE’s North America Operations’ management board.

Alegre is a veteran of 25 years in commercial real estate, including appraisal, consulting and brokerage. At Playa Capistrano he provided specialized consultation services to corporations and other real estate organizations in the US and abroad. He started with CB Commercial in 1984 and became that firm’s top appraisal producer nationwide. He is the co-author of books such as the Commercial Real Estate Sales Guide and A Tenant’s Guide to Leasing Commercial Real Estate.

Haney says that he will be involved closely in the hiring of new appraisers and the expansion of Grubb & Ellis Landauer into new markets , including the organization of the company into three regions: West Coast, Central and East Coast. The effort will include a place on the Grubb & Ellis web site where prospective new hires can apply.