SANTA CLARA, CA-Brokerage firm Kidder Mathews, the Seattle based GVA affiliate that entered the San Francisco market in 2006 by acquiring Whitney Cressman, is now close to entering the Silicon Valley market through Wayne Mascia Associates, a longtime Santa Clara-based brokerage firm. The merger, slated to become effective at the end of the year, would nearly double Kidder Mathews’ presence in the Bay Area, taking it to 59 brokers from 29 brokers in that market.
Wayne Mascia Associates, currently affiliated with TCN Worldwide, has been courted by several national firms in recent years. If the deal with Kidder Mathews is consummated as expected, the brokerage firm will remain at its Silicon Valley location, 3945 Freedom Circle, and will re-brand itself as GVA Kidder Mathews Wayne Mascia over the next few months. Wayne Mascia, the individual not the company, will become a senior vice president with GVA Kidder Mathews, responsible for business development and integration of the firms.
“We have been keeping our eyes open for the right opportunity to grow our presence, but we also wanted the best platform for our brokers,” Mascia says. “By joining GVA Kidder Mathews we get an enormous addition of resources and…services for our clients, including valuation and property management services, and we feel the brokerage compensation platform, through aggressive commissions and the opportunity to earn stock ownership, is second to none in the industry—and a hard combination to find.”
The GVA Kidder Mathews platform offers its executives, managers and top brokerage professionals the opportunity to purchase stock in the company and lets its brokers keep 90% of the commission once they top $125,000. GVA/KM chief executive Jeff Lyon tells GlobeSt.com that the company has spun off the company’s Northern California operations and will allow Wayne Mascia and his partners and top professionals the opportunity to buy stock in the Northern California operations of GVA/KM, as will other top professionals who may ultimately decide to leave their existing firms to open a new office for GVA/KM.
“When you show people the long-term opportunity, that’s what gets them excited,” Lyon tells GlobeSt.com. “It’s something unique that nobody else is doing; it will allow us to attract top –notch professionals.”
The financial details of the merger itself have not been revealed but generally include an up-front payment for the company as well as a five-year earn-out based on revenue and a certain capitalization rate. If the firm maximizes its revenue, Lyon says there is the potential for a seven-figure payout at the end of the five-year period.
GVA/KM provides brokerage, consulting, property management, appraisal, and construction management services through eight offices in Washington (5), Oregon (1) and California (2), not including Wayne Mascia Associates. The company manages 22 million sf and conducted 900 appraisals in 2007 in addition to brokering $2.5 billion in transactions.
Kidder Mathews was launched in 1969 by Jerry Mathews and partners Bill Kidder and Bob James. It grew to be the largest independent firm in the Puget Sound region before switching its alliance from Insignia to GVA and expanding into Portland in 2003. Based on its success in Portland, GVA/KM entered the Bay Area three years later by acquiring Whitney Cressman, which operated out of a single office in Downtown San Francisco when it merged but now has a second office in Redwood Shores and twice the number of brokers.
Wayne Mascia Associates has been in the Silicon Valley for 35 years and has a strong presence in the market, with 26 brokers who specialize primarily in high-tech tenant representation services. Mascia tells GlobeSt.com he plans to buy stock in the GVA/KM Northern California and will stick around as an SVP for at least a few years “to make sure what we started with my company gets finished.”
Mascia expects most of his brokers to stay on through the merger as well considering they stand to make a lot more money. Under the current platform, his brokers don’t get to a 90%-10% commission split until they do $450,000 in business. “Somebody needed to bring in a different platform and they have done it; it’s a good deal” he says. “The idea is they don’t have large offices, they have productive offices, and they tend to keep everybody and they recruit well because of the split and the stock option.”