Hendricks' SoCal Acquisition Launches Expansion

Delson/Norris/Fischer, founded by Rod Delson, is a boutique multifamily specialist that has been in business since 1985 and recently surpassed the $1 billion sales mark with more than 7,000 units sold. In addition to Delson, the firm includes partners Vince Norris and Edward Fischer. Hendricks tells GlobeSt.com that the new office of Hendricks & Partners will remain in Woodland Hills but will move into new quarters in Warner Center, where the company plans to expand the office with the hiring of additional brokers.

The new Woodland Hills office is the sixth that Hendricks & Partners has opened in the US in the past six months. It joins existing H&P locations in Pasadena, Encino, West Los Angeles, North Orange County, Newport Beach, the Inland Empire and San Diego.

The expansion runs counter to the pullbacks and cutbacks by many if not most apartment brokerage firms, according to Hendricks, but he says that Hendricks & Partners is well-positioned to execute the expansion. "We are debt-free with substantial cash on hand," he says.

"Many of our competitors, which are all good firms, are cutting back services for apartment owners because they don't have the money for marketing or research services for their clients," Hendricks says. His firm is heading in the other direction, having invested $50 million in infrastructure, technology, research systems and staffing for a new national apartment marketing and research center that opened about a year ago.

The new marketing and research center is servicing apartment owners, lenders and servicers nationwide in workouts, underwriting and valuation. Hendricks is enjoying "a tremendous uptick in both the Hendricks & Partners pipeline and in overall business activity" because of the additional services that it is offering with the new center, the company founder says. Clients include apartment owners, banks and other lenders, servicers, life insurance companies and others involved in the multifamily industry.

Hendricks explains that his company is well-positioned to expand despite the downturn for a number of reasons. For one, it has remained mindful of the lessons of the late 1980s and early 1990s. "We knew that the catastrophic collapse of multifamily real estate during that time had the potential to happen again, so we built our company out of cash flow--with no debt, no outside partners and no venture capital," he says.

The company expanded into new cities and added new offices in its first 10 years or so in business, but it pulled back from that growth rate in recent years in anticipation that the market would turn. "We stood pat for a couple of years to wait and see the impact of this new marketplace, which has turned out exactly as our research group had projected," Hendricks notes.

Part of its strategy in the new round of expansion will be to hire experienced brokers only, the same hiring policy that it has always followed. "We will hire only the most experienced sales advisers. We are very selective," says Hendricks. He points out that the average age of Hendricks brokers is 50, with an average of 20 years of experience in the local market.

With the changes wrought by the market downturn, Hendricks & Partners is getting calls from "some of the top apartment advisers nationwide" who are interested in joining the firm, according to its founder. He says that among the attractions of a move to H&P is that its brokers do not have to manage or pay for any of the support services that they have to pay for at many other firms.

Hendricks grew by 50% per year, on an unleveraged basis, in annual transaction volume, revenue and income for its first 10 years in business, Hendricks says. The company doesn't expect to return to 50% annual growth, but it does expect to achieve growth of 25% to 35% per year, beginning in 2010, Hendricks tells GlobeSt.com. He says that, along with that growth, Hendricks & Partners expects to double or triple its market share in the multifamily investment sales and services arena, where it is already the largest firm in the US devoted exclusively to apartment sales, research and services.