HQ Global Antes Up Brokers' Commissions

The program is being unveiled as HQ Global works through a pre-packaged Chapter 11 bankruptcy that pumped $30 million of capital into the coffer of the Dallas-based business center provider. Previously, no commission was paid for renewals, Juliette Colon, vice president of field sales, tells GlobeSt.com. She says the program is a conduit for rewarding brokers, but admits that upping occupancy is just as important.

HQ Global closely guards its occupancy data, but an inside source pegs the current level at roughly 70% for the six million sf of class A and B product in its 325-building network spanning 32 US markets. Another 75 locations are positioned overseas, primarily in the UK.

Colon says this is the first time that HQ Global has offered such a program in its 40-year history. The business center market has become increasingly competitive, with HQ Global's chief rival, Regus, turning to outsourcing its brokerage operation. Colon says HQ Global's 28 sales managers are not facing the same fate. "Nobody sells HQ better than HQ," she says. The extra commission is a vehicle to enhance relationships with the brokerage community. "It's our way of showing the brokerage community that we really do want to be partners," she emphasizes.

Colon says the Chapter 11 filing caused rumors to surface that brokers would not be getting their commissions from HQ Global. That simply is not true, she stresses. "We made sure there was no way the brokers would be affected and we got the banks to put it in writing," she confided.

The "Partners for Profit" program is an outgrowth of the reorganization that got under way with the shuttering of 40 US locations prior to the mid-March Chapter 11 filing. Colon says the closed sites were situated in underperforming markets or areas such as Phoenix, where HQ Global ended up with centers on four corners of an intersection due to an acquisition or merger.

According to Colon, word about the extra commission already has filtered out into the brokerage community and the response has been good. Joe Wallace, senior vice president of business development, says commissions will be hand-delivered after the broker's client executes the required two-page contract and pays all up-front charges.

HQ Global's majority owner is New York City-based FrontLine Capital Group. Its president, chairman and CEO is Scott H. Rechler, who also is co-CEO of Reckson Associates Realty Corp. of Melville, NY.