GlobeSt.com UPDATE: I/ESG Office Sustains Local Broker Exodus

PHOENIX-Insignia/ESG’s Phoenix brokers are jumping ship to take jobs with other local real estate firms as the company moves to solidify its sale to CB Richard Ellis Inc., sources tell GlobeSt.com. The New York City-based brokerage house’s corporate office labels it “a very isolated situation.”

“Most of the Insignia/ESG teams are leaving prior to the acquisition. Only a very small handful of Insignia brokers will stay on after the merger,” said one Insignia insider. The source said “philosophical differences” over the way CB Richard Ellis handles business along with a glut of existing CB brokerage teams, is the reason behind the mass exodus.

“It’s not that people don’t like CB. It’s a great company,” said another broker, who recently left Insignia. “But they are set up in such a way where there are teams that do certain things and those teams are protected. For somebody to come in and break into that is really tough.”

Insignia/ESG’s corporate office, though, sees it another way. “The fact that the brokers in Phoenix have departed is really a localized issue due to the unique strength CB has in that market,” the firm’s spokesman told GlobeSt.com. The company he adds, has been successful in retention. “We’re very confident with where we’ll be once the merger is completed.”

About 20 Insignia brokers have taken jobs or are currently negotiating for Phoenix-area positions with Dallas-based Trammell Crow Co., another seven are now working for Northbrook, IL’s Grubb & Ellis Co.’s Arizona team and others are on board in the local offices of New York City-headquartered Cushman & Wakefield Inc. and Boston’s Colliers International, the sources said. Only a handful of Insignia’s estimated 50 brokers, most of whom are under contract with Insignia, will remain following the merger, the sources said. For previous story, click here.

One of the key reasons behind the sudden departures, the inside sources explained, is that few brokers are confident they will have positions with CB Richard Ellis once the merger is complete, which is anticipated for June. “If you’re an office broker or an industrial broker, it doesn’t take a brain surgeon to see CB already has brokers in those areas they are more likely to be loyal to,” said the Insignia source. “A lot of them feel they’re not going to have a job with the new operation so it’s not surprising they’re jumping ship.”

When the merger’s done, it’s highly unlikely that the slots will be filled. “there weren’t be any need to hire more brokers because then we’ll have the No. 1 position,” the Insignia spoeksperson said.