Eighteen months after selling Hunneman Real Estate Corp. to a leading New Jersey based brokerage firm, company CEO Stuart W. Pratt has reacquired Hunneman’s commercial division, industry sources told Banker & Tradesman last week. The company is based at 70-80 Lincoln St. in Boston.

One source familiar with the deal maintained that new owner NRT Inc. had given up on its initial vision for the commercial arm. At the time of his firm’s purchase of Hunneman in October 1998, reportedly for more than $60 million, NRT President Robert Becker said that we see Hunneman’s commercial company playing an invaluable role in our plans to create a strong national commercial brokerage operation.

Neither NRT nor Pratt returned phone calls by press time, but if anything, the commercial group seems to have backtracked since the merger, losing ground locally to several major national firms that have marched into Boston and even abandoning some brokerage lines, such as retail. (See related story on page 13.) One recently departed employee, for example, maintained that the Hunneman name in commercial circles has minimal value.

A broker at a competing firm was more kind, maintaining that there is some goodwill left in the name. The firm does have several veteran professionals, including Wayne Spiegel, Richard Lundgren and Carl Christie, but several other leading brokers have left the firm since the NRT merger. Overall, the broker agreed that Hunneman has been usurped by other players.

They’ve still got some good people, but I would say they aren’t one of the majors, said the broker. When you think of commercial real estate in Boston, they certainly aren’t in the top five.

At this point, details of the sale are unclear, including whether others at Hunneman are also involved in the takeover, or what the sales price truly would be for the division. While it is anticipated to exceed seven figures, most spoken with agreed that it would never approach the $32 million paid by Trammell Crow for Fallon Hines & O’Connor or even the reported $22 million fetched last year for Lynch Murphy Walsh & Partners by Insignia/ESG.

It’s anybody’s guess, said Peter Capobianco, an accountant and real estate specialist with E&Y Kenneth Leventhal. Capobianco, who said he was unaware of the Hunneman agreement, helped in assessing the price of both FH&O and Lynch Murphy. While stressing that he could not comment on the Hunneman value, Capobianco said such appraisals are usually based on a formula tied to the company’s earnings, such as EBI — annual earnings before interest. The professional talent on board such an entity is also taken into consideration, Capobianco said, as would be any property holdings the company might have.

The breadth of the commercial company’s assets is unclear, but Pratt has been active in several recent development deals, including a mixed-use project underway in Cambridge’s Central Square. Pratt’s Congress Ventures LLC also just acquired 303 Congress St. in Boston’s Fort Point Channel district from Nationwide Life Insurance Co. That $1.7 million purchase is in advance of Congress Venture’s plans to replicate a 70,000-square-foot office building that once stood on the site before it collapsed into the channel following a structural failure.

‘So-So Market’
It appears, however, that neither of those projects is tied directly to Hunneman’s commercial group, with Pratt already listed as president of Congress Ventures. Capobianco also said that the appetite for local real estate firms has been largely sated, with most of the national names already established and the availability of capital significantly reduced from that seen during the past three years.

Right now, the market is so-so, Capobianco said. It’s definitely not as frenetic as it was.

Whatever NRT’s motivation was, the main benefit to buying Hunneman in October 1998 was driven by the residential piece of the firm. At the time, NRT scooped up 75 Hunneman & Co./Coldwell Banker residential offices in both Massachusetts and New Hampshire, giving the Parsippany, N.J., company an instant stake in New England. Hunneman/Coldwell had an estimated 3,000 employees when the merger occurred; it is unclear what the current number is.

Currently, NRT has 30,000 sales associates nationally, having picked up another 100 offices since buying Hunneman to where it now has 700 locations. Despite that growth, the firm did struggle a bit last year, postponing its 1999 initial public offering for undisclosed reasons.

According to the company Web site, the Hunneman Commercial Co. provides a range of services, including sales and leasing, construction management, appraisal services and property management. One recent industry guidebook listed 17 brokers, although at least one of those has since departed. The commercial group is part of New America International, an international network of real estate service providers.

Pratt Buys Hunneman Commercial

by Banker & Tradesman time to read: 3 min
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