Raymond James No. 1 By Default

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ST. PETERSBURG, FL-Raymond James Financial Inc. has become the nation's largest investment bank by default, with the conversion of larger rivals Goldman Sachs and Morgan Stanley to commercial banks. But what this means for the locally based corporation's expansion plans is up in the air at this point, much like a punted football.

Raymond James is currently the largest office tenant at the Carillon mixed-use development in St. Petersburg, with roughly a million sf in four midrise buildings. It also has 2,200 offices around the world, either owned or leased, offering investment, brokerage, financial planning and asset management services.

The company owns vacant land for future expansion at Carillon, where it enjoys high visibility along Interstate 275, yet is said to be looking across Tampa Bay for possible expansion in north Hillsborough and south Pasco Counties, according to local brokers familiar with its plans. Raymond James executives, who were unavailable for comment Tuesday, have stated for years that they have been studying various options.

With annual revenue just above $3 billion last year, Raymond James is considered an up-and-comer among investment stalwarts such as Lehman Bros., which declared bankruptcy Sept. 14, and Merrill Lynch, soon to become part of Bank of America. It advanced its name recognition over the past decade by securing naming rights to Tampa's Raymond James Stadium, where it gets added exposure during Tampa Bay Buccaneers football games, the 2001 and 2009 Super Bowls and other stadium events.

Given its new lofty position among investment banks, local commercial real estate observers wonder whether Raymond James can take advantage of a potential growth opportunity or position for a similar merger with a much-larger banking concern. "It could go either way," says one office broker who didn't want to be identified.

As uncertain as its real estate plans is Raymond James' standing among the Wall Street analysts tracking its performance. Earlier this week, Keefe Bruyette & Woods downgraded the company's stock, from "outperform" to "market perform," effectively reversing the upgrade it applied this past summer. Raymond James reported Tuesday that its securities commissions and fees for August, totaling $139.8 million, are off by at least 10% from the same month last year. Thomas James, the company's chairman and CEO, stated in a release that "we are in the process of witnessing the worst global financial crisis" since the early 1970s.