Aug. 9, 2013
Real Estate Reporter- Silicon Valley Business Journal
Commercial real estate brokerage Avison Young is based in Toronto. But ask CEO Mark E. Rose where he spends most of his time these days, and he is ready with a quip: “21 days out of 30 days a month, I’m an American,” he said.
The grueling travel schedule correlates with a growing number of dots on the map for privately held Avison, which has zoomed from zero to 34 U.S. offices since Rose became CEO five years ago.
The latest dot is in San Mateo, where Avison announced last week it would open an office after luring away longtime Cassidy Turley broker Randy Keller to staff it up.
“It was a good time and a good match,” said Keller, who was Cassidy Turley’s managing director in Burlingame. “There’s a real sense of pride and growth, and everyone gets excited about that.”
The arrival is the latest sign that outside brokerages want a piece of the Silicon Valley market, which has been among the best performing in the nation during the economic recovery.
Yet competition for talent and entrenched players here can create strong barriers to entry. Kent Elliott, a principal at RETS Associates, a recruiting firm, said everyone from brokerages to developers to real estate investment trusts are all competing for employees right now.
Avison Young may benefit from its newcomer status, he said.
“It’s all about the story,” he said. “They can certainly make good, solid hires. It’s got to be the right person who wants the challenge of growing a brand from something that is not well known to something that is.”
Rose said they’ve had no problem so far. “It’s the same program in every city: We find the person we want to build the office around, and then follow up with individuals, teams and acquiring companies,” he said.
He added: “In Washington, D.C., we started out with three people. Fast forward two years and we have more than 100 people and we’re in the top five for market share in that region.”
A $40 million investment in Avison Young from Vancouver-based Tricor Pacific Capital, a private equity firm, in 2011 is helping fund expansion. Avison doesn’t release financial information, but Rose said the firm is profitable and debt free.
For now, Avison Young remains a smaller player, ranking 22nd on National Real Estate Investor’s top 25 brokerage list for 2012. That list pegged the company with $2.8 billion in leasing and sales transactions. That’s a fraction of No. 1 CBRE, which reported $128.1 billion, or No. 2 Jones Lang LaSalle, which did $67.2 billion.
Still, Avison Young has been a regular in the trade press, grabbing headlines last April when it hired Arthur Mirante, the 20-year CEO of Cushman & Wakefield, to run its Manhattan office. That same month, Avison hired Cornish & Carey Commercial Newmark Knight Frank’sNick Slonek to head up its first office in San Francisco. A flurry of hires followed.
“This is already a national platform,” Keller said. “I would not have been comfortable going to a startup operation that has one or two offices.”
Sources say Avison is willing to write sizable checks to bring key people on board – a standard strategy during strong real estate cycles.
Rose said Avison offers “the same or less” than competitors when it comes to signing bonuses. Rather, Rose said, Avison Young’s bigger pitch for brokers is simple: A structure more like a law or accounting firm than a traditional brokerage, with principals receiving equity and annual distributions.
“Our people also own this company,” said Rose, a former CEO of Grubb & Ellis. “Bill Gates has $67 billion not from working at Microsoft, but because he owns Microsoft.”
Keller credited the culture as a major draw. “It was definitely one of the pieces for me individually,” Keller said. “In past conversations with brokers over the years, it’s clear they want to own a piece of the firm they’re working for. You can buy CBRE or JLL stock, but that’s not the same.”
Keller, who has leased or sold more than 14 million square feet in his career, is focused on increasing the company’s visibility — starting with finalizing a lease for office space.
“It’s getting out in front of the community and letting them know about Avison Young,” he said.
Meanwhile, Avison Young is planning further expansion — in Europe and Asia.