After foreclosing on the 44-story, 650,000 sq. ft. Gulf & Western Building in New York's midtown, General Electric Investments, New York was searchin for the best way to maximize its ROI. GE hired the New York office of The Galbreath Co., based in Columbus, Ohio, to conduct a reuse and redevelopment feasibility study on the office building.
Due to the property's Central Park location, the fact that the existing office market was soft and that the property's major leases were about to expire, Galbreath suggested that GE redevelop the building for luxury residential and hotel use.
While that study was being completed, GE also assigned Galbreath the management and leasing contract for its 14 Wall St., where Galbreath quickly reduced operating expenses by 30% and raised the occupancy level to 89%.
In the meantime, GE accepted Galbreath's recommendation for the Gulf & Western Building, and last fall the $225 million project broke ground, with The Galbreath Co. and Donald Trump as co-developers and joint venture partners.
So in just two years, Galbreath expanded its relationship with General Electric Investments from that of consultant to manager and leasing agent, and most recently, to that of developer.
This expanding service concept is the basis of the 75-year-old company's business philosophy and one they have repeated many times, to a greater or lesser degree, with clients such as Dayton, Ohio-based Mead Corp., New York-based Goldman Sachs & Co. and Columbus-based Banc One, to name just a few.
"Our business is built on our relationships with clients," says Lizanne Galbreath, chairman and CEO of the company. "That won't change."
It hasn't changed over the last three-quarters of a century. Galbreath's grandfather, John Galbreath, founded the firm in 1921, building company towns for US Steel (now USX). Her father, Dan Galbreath, who passed away last year, ran the company from 1980 to 1995.
Today, the Galbreath name is attached to one of the largest privately owned real estate companies in the country.
Over time, the company's property type of favor evolved from residential to commercial, but its reliance on building business relationships remained a constant, along with the type of companies with which it worked - major corporations.
The company's portfolio, administered from 33 domestic offices divided into three regional divisions (East, Midwest and West), encompasses more than 95 million sq. ft., doubling its size since 1990.
The client list includes more than 150 Fortune 500 firms, to whom Galbreath offers a full range of real estate services, including asset and property/facilities management, leasing, tenant representation, investment sales, consulting, development, redevelopment andservices. The company also provides the latest in accounting and reporting software and methods to its clients.
An in-house capital markets group also offers help with financing. "We are trying to provide full service to our clients, and that arm is important," says Galbreath.
Through Savills Galbreath, a separate company founded in 1994, the firm offers clients international real estate services in 70 cities across Europe, the United States, Asia-Pacific and South America.
"The service side of the business is where the fabulous opportunities are right now," says Galbreath. Being in position to offer these services to the companies that need them is the key.
"The company's strongest suit is our focus on existing client relationships," says Bruce Mosler, president of the company's Eastern Division. "We are a service organization, and we favor building long-term relationships."
This type of relationship building, often called partnering, involves a level of sharing information that goes well beyond the normal business transaction.
"Where we are most effective is when we attend our client's strategy sessions to find out what their goals are and how best we can serve their real estate needs to meet those goals," says Larry Lance, president of the company's Midwest region. "We have senior real estate professionals that have a strategic view of the industry. They are not just focused on management, leasing or construction, but instead can speak as one voice about how Galbreath can deliver some of these service capabilities to different parts of the country to benefit the client."
Trust isn't developed quickly; it is based on a company's past record of performance and integrity.
"Our track record and our proven ability to complete assignments successfully for Corporate America helps," says Galbreath. "Integrity is the hallmark of this company, and it is more important than any piece of business that we do."
For example, Galbreath turns down service opportunities if it doesn't feel it best serves the client's needs. "That is the reputation that we have acquired, and it is how we do business," says Mosler. "You couldn't develop good relationships any other way."
These business relationships not only provide avenues for new business, but for more efficient operation as well.
By providing more services to the existing client base, the company increases its business without the added cost involved with bringing in a new client, says Lance. "The data on the client's business, the comfort level between the client and ourselves, and the structure and reporting systems already exist," he says. "So I would much rather expand an existing relationship vs. creating a new one but, of course, the reality is you have to do both."
Currently, about half of the company's business growth is derived through new services for existing clients, he says.
But before a company can offer these services it has to develop a real estate team that can provide them.
The Galbreath Co. made several acquisitions in the early-1990s that greatly enhanced the company's service capabilities. In 1993, it acquired Pittsburgh-based Tri-Cor Realty Partners and New York-based Riverbank Realty. Later, in 1994, they purchased Norris Beggs & Simpson, a San Francisco Bay area-basedand management company and then merged, in 1995, with Alex Summer Co., now based in Morristown, N.J.
While these acquisitions substantially increased the company's property portfolio, that wasn't the main objective.
"You try to team with a company to buy the service capabilities," says Lance. "[The acquisitions] were really human resources driven, more than portfolio driven, because if you have good people, then the rest of the business will take care of itself."
The acquisitions increased the size of the company's workforce by about 40% to its current level of 2,500. "Our whole business is built around competent talented staff," says Lance.
When Galbreath takes a new property into its portfolio, this depth of personnel comes into play. Lance says pre-organized "transition teams" with professionals from every discipline within the company are sent to the new property to assess what is needed and to ensure a smooth transition of services.
The company's wide range of services also provides more market knowledge to help with decision-making.
"We are managing on an asset management level," says Mosler. "So we are evaluating the property in a number of various ways. A unique character of our organization is that we provide so many services that we have a perspective that few firms can offer."
Questions about future growth were behind Galbreath's move into international markets through the co-founding of Savills Galbreath. "Domestic business is going the way of mergers and consolidation," says Mosler, who specializes in producing new business for Galbreath. "As a result, new growth will have to take place on the international scene."
A joint venture between Galbreath and Savills, a full-service real estate firm located in the United Kingdom, Savills Galbreath is a separate company, jointly funded by the two parents, that provides an international real estate services network for companies. Membership, although highly selective, has increased by 20% since the company was formed. Most of the members are smaller firms that operate, for the most part, in local markets. The services offered by Savills Galbreath have been scaled back from the large selection The Galbreath Co. provides, because, says Mosler, "we wanted to be highly focused to achieve results."
Mosler says Savills Galbreath has proven successful. Galbreath recently added Reuters America Holdings Inc. to its client list. Reuters currently occupies about 800,000 sq. ft. in the New York area. "The Savills Galbreath relationship was instrumental in our landing that contract," he says.
Whether or not the business is domestic or international, The Galbreath Co. still feels success depends on the people in the company. "We have a tried and tested team running this company," says Galbreath. "And we all work well together because we share the same vision of The Galbreath Co. and are committed to being the best."