Based at 125 Summer St. in Boston, the newly formed firm of Richards Barry Joyce & Partners has been contacted by numerous commercial real estate brokers seeking employment.
It appears the broker shuffle might soon be back in vogue in the Hub.
With the commercial real estate market in a sudden state of flux, the face of Boston’s brokerage community is poised to undergo dramatic changes over the near term, with personnel shifts anticipated at some of the area’s leading real estate service firms. But although layoffs are already occurring at several local companies, observers say the bigger news could emerge as some of the industry’s top producers seek out greener pastures on their own.
I don’t think any firm is going to look the same in a couple of months, Trammell Crow principal Robert E. Griffin Jr. acknowledged last week. It seems like everybody is talking about moving here, there or everywhere.
Former Trammell Crow broker Robert B. Richards, who left the company in June to form his own operation with several colleagues, agreed there is considerable milling about at present. He added that Richards Barry Joyce & Partners has even fielded inquiries recently from some brokers about possible positions at the new entity.
We’re constantly amazed at the level of people who are approaching us, said Richards. While declining to provide names, he did concur that there’s a lot of scrambling going on right now.
Movement within the area’s brokerage sector is certainly nothing unique. In 1999, for example, Meredith & Grew veteran James J. Adams left to join Insignia/ESG at virtually the same time that CB Richard Ellis/Whittier Partners broker Ronald Perry moved over to Meredith & Grew to run its downtown brokerage division. According to some, the entrepreneurial nature of the industry makes it a natural for professionals to pursue such peripatetic paths.
Griffin maintained that the lack of activity in the brokerage business at present is another likely contributor to the growing trend toward career introspection. When the market is this slow, people have nothing else to do than look at their own personal situation and [attempt to assess] where they want to be headed, said the investment sales specialist.
It is unclear whether the turmoil caused by the terrorist attacks last month has increased the potential migration of brokers, given that the real estate market was already headed into a steep downturn well before Sept. 11. Richards said he and his new partners were mindful of the changes on the horizon when they made the leap toward independence in June, adding that the economic malaise did play a role in their timing.
We thought it was going to be a struggle and we felt, if it is going to be a struggle, let’s try to do something for the long-term, he said. We feel like we are building for the future.
That forward-thinking mindset could also play into the company’s favor, said Richards. Talks of downsizing, the likelihood of reduced commissions and a lack of business prospects could serve to dampen enthusiasm at the larger companies, he suggested, whereas the staff at Richards Barry Joyce & Partners is looking at nothing but upside from its fledgling operation.
We see a lot of clients being attracted to this type of profile, he said. There’s a real energy and enthusiasm that you might not find everywhere right now.
Starting Up
If there is a substantial movement in the brokerage community, it could underscore a pitfall in the recent pattern of national real estate firms coming into the region and buying existing operations. Such was the strategy of both Trammell Crow and Insignia/ESG, with the two entities each shelling out millions of dollars during the past few years to establish a business beachhead in the Bay State. Trammell Crow acquired the successful Fallon Hines & O’Connor in May 1998, while Insignia/ESG took over Lynch Murphy Walsh & Partners in March 1999.
The approach certainly gave both companies immediate credibility in the market, with Trammell Crow picking up the likes of Griffin and his Investment Services Group and Insignia gaining a stable of leading investment and leasing brokers, including Stephen J. Murphy, Gregory P. Lucas, Steven E. Clancy and Thomas A. Walsh.
Even with built-in incentives to keep the principals on board at the outset, the national companies cannot hold onto them forever, however, and sources say the clauses which kept some of Boston’s best-known brokers in check have either expired or will do so during the near future.
Richards’ organization itself has several brokers on board who defected from national companies. John Lashar and Jonathan Varholak came from Cushman & Wakefield, for example, while John C. Wilson left Insignia/ESG. Along with Richards, Trammell Crow transplants at the new company include Michael Frisoli and John Barry.
Besides moving to other companies, observers said some brokers may strike out on their own or possibly even form a new firm similar to Richards Barry Joyce & Partners. Meredith & Grew principal Robert B. Cleary Jr. said certain brokers might decide they can better serve their clients independently, but stressed that he has not seen any evidence that the brokerage landscape is on the cusp of significant changes.
I don’t really think you are going to see a big trend [of defections] in the marketplace, he said.
