Studley’s Bogle

The announcement last week that international commercial real estate services firm Studley had acquired lease administration provide Gravitas was just the latest move in the bolstering of Studley’s services in what the firm says is a rapidly growing niche. GlobeSt.com’s Debra Hazel spoke with Thomas W. Bogle, executive vice president and head of its Strategic Portfolio Solutions Group about the acquisition and how it plays into Studley’s growth strategy.

GlobeSt.com: Why are you expanding your services now when real estate is still recovering?

Bogle: It’s client-driven more than anything else. Studley’s been in business 57 years. We’ve made money every year. We have a very strong client base. But as the industry evolved, clients were coming in and saying, “We need more from you. We like you--you’re professional. You’re smart. But we want you to do more things for us in more places. There are a lot of your competitors who are big, but we’re not getting some of the value we get when we work with you.” We had three or four clients we’ve done a lot of work for over the last decade who came and said can you help us with this or that.

Also, there’s a tremendous opportunity right now in the market for talent. A lot of people who grew up in the real estate industry love the entrepreneurial aspect. And a lot of the competition has gotten so big, so bureaucratic and difficult to move that they were looking to do other things. We’ve been able to bring in four or five dozen people from our competitors and some of the big four consulting firms, and really pick the cream of the crop.

GlobeSt.com: You formed the Strategic Portfolio Solutions Group 18 months ago. Why change growth strategies by acquiring Gravitas?

Bogle: Whenever you look at expanding, you can either have a build or a buy mode. Initially, when we looked at how to build our lease administration and audit, real estate technology systems consulting and lease abstracting--the kind of things Gravitas did--we believed we could get to a point of excellent client service faster with the right acquisition. We looked at several firms across the country, entered into due diligence with a few of them, and decided that Gravitas had the right mix of, first, culture -- theirs was a very entrepreneurial culture and one that only focuses on tenants and users, not landlords. Secondly, they had a great client base that also was asking them, “Can you take us to other places? Can you do other things for us?” It really was a great match to put the two of them together.

Gravitas will operate as a wholly owned subsidiary?

Bogle: Yes. The entire Gravitas company has been acquired, and it is operating within the Strategic Portfolio Solutions Group. It will be branded as Studley. The only exception is the lease audit function. They had a very strong brand in lease auditing, particularly in retail, so we chose to let that brand remain distinct. Everything else is Studley..

GlobeSt.com: Are the two cultures integrating well?

Bogle: Yes. We’ve got people in their offices in California, Atlanta and we’re in the process of integrating their people and our people in the New Jersey offices.

GlobeSt.com: Are there other niches you’re looking to augment?

Bogle: Our goal was to have a four-legged stool. We had strategic consulting; we decided that was a build, so we handpicked the best strategic consultants across the country and pulled people in for that. The transaction management piece was one where we had a lot of internal talent, so we supplemented that with some talent from our competitors over the past 18 months. The third piece was project management, with which we also chose to take a build mode. We’re not just trying to copy the big boys with lots of dots on the map. Clients are telling us they’re not always enamored of that model. If you’re just trying to be a “me, too,” that’s not the culture of Studley. The culture of Studley for 57 years has been innovation, creativity, agility and flexibility. That’s the way we’re building our practice. The fourth leg is the leasing piece, which we’ve acquired with Gravitas.

GlobeSt.com: Are you still looking to acquire other companies?
Bogle: I would say we’re opportunistic. Studley is a privately owned company, but we would certainly be open to things that make strategic sense to our stockholders. In terms of the initial goal for Strategic Portfolio Solutions, we have the pieces in place now to compete effectively against our competition. And, in fact, we are winning. We put out 20-something proposals in the past 18 months, and we’ve made the short list on every single one of them. We know we’re able to compete across the country for these types of assignments.

GlobeSt.com: Should we consider this a sign of optimism for commercial real estate?

Bogle: There’s no question that the corporate services arena within commercial real estate continues to rapidly expand. You can see that in the analysts’ reports and in the number of requests for proposals. There’s somewhere between 150 and 200 RFPs and RFIs that come out per year in just this segment of the business. And that is increasing. We’re actually responding to more than we anticipated.

If you look at some of the analysts reports about the size of the total market, most would say less than 30% of the total global market has even been tapped yet. In addition to being able to compete effectively against our competitors who are already servicing clients and existing opportunity, there’s a tremendous world of opportunity for clients who have never heard about or used this delivery model to be able to solve their real estate issues.

The other thing that favors us and our model right now, which is very unique, is that we are the number one provider of independent real estate representation services globally when it comes to just representing users and tenants in the market. We do not represent landlords. As clients increasingly say, “We want to use an adviser that is not conflicted by also owning, managing and leasing a lot of properties,” that puts Studley in an extremely attractive position globally.

GlobeSt.com: As you continue to grow, is there a concern that your culture will change?

Bogle: I would contend that after spending most of my years with large businesses in this industry some of the competition might already have reached that point. We are a much more agile company than our competition. We probably have 50 offices around the globe. We’re not a network. We are wholly owned. In seven, eight or 10 years from now it could be a concern--how do you keep the qualities I mentioned earlier, the nimbleness, agility, creativeness and innovation that our clients are hiring us for? But it’s not an issue now.