An innovator from the outset, Julien J. Studley marches into new markets and continues to take a unique approach to the brokerage business.
In a speech at a recent Atlanta real estate gathering, Julien J. Studley quipped, "If people are crying, make handkerchiefs." That one, simple statement epitomized an ability to quickly grasp a situation and act, qualities that mark Studley and the company that bears his name.
As a teenager in 1940, Studley helped his family escape Europe, guiding them past a French checkpoint as they fled Belgium. He had no choice but to quickly grasp the situation and react in order to help save his family from the Nazi conquest of Western Europe and his native land. Following brief stints in Morocco and Cuba, the Studley family moved to New York in the mid-1940s where young Julien began a career as a diamond cutter. Like many current real estate giants, Studley found his calling after reading about the legendary exploits of William "Big Bill" Zeckendorf and Zeckendorf's efforts to assemble the land deal that would bring the United Nations to New York City.
So, Studley literally pounded the streets of New York, found a low-paying real estate job and embarked on a career in commercial real estate. Initially, Studley floundered, cutting diamonds at night as a means to make ends meet, before being drafted into the U.S. Army in 1950.
The outsiders In the Army, Studley was thrown in with a Tennessee National Guard unit, causing a great deal of culture shock for all parties involved. At the outset, Studley had a problem with the arrangement - a Jewish immigrant from New York, admittedly a not-so-great soldier in a unit of country boys who had grown up with rifles in their hands. Again, Studley grasped the situation and helped create a positive environment. He started teaching Russian to his comrades - Studley's mother was from Russia, and he speaks several languages - and he learned to appreciate his counterparts' culture and way of life. Eventually, Studley was transferred to a psychological warfare unit because of his language skills. There, he met several young men who would one day be clients and business partners.
"The Army truly was a revelation," Studley remembers. "I really feel like I became an American and identified with this country. I felt very self-confident when I left."
A changed person, Studley returned to New York to the sales job he held prior to enlisting in the Army, but after a disagreement with his employer, he decided to set out on his own. Upon attaining his brokerage license, Studley founded the company that bears his name in 1954 and immediately changed the brokerage business almost by accident by specializing in tenant representation.
"Nobody was taking the tenant part," says Studley. "Nobody even thought about representing tenants. It wasn't like I had a strategy.
"I just really liked working with them," he says. "They were not well-informed, but they were eager to learn. They listen to you, and if you give them good advice, they appreciate it. To me, it was pretty natural."
Commission-paying landlords perplexed by this new tenant rep business, asked, "If we are paying you, how come you're representing the other side?" Owners were not happy, but learned to accept - and, later, in many cases to appreciate - a new outlook.
"This was the only business in which the consumer was not represented," says Studley. "I learned to appreciate why the owners were resentful initially, and why they finally accepted us. They realized that one of the things we try to be creative about is how to show that two positions that are different don't necessarily need to be conflicting."
For example, early on Studley found that tenants were concerned about how much they paid on a present-value basis because, "money early is more expensive than money late." Tenants wanted to hold onto their money and were willing to pay more at the back-end of the lease in order to accumulate interest. With a few subtleties in the lease, the arrangement works beautifully because owners want rent increases as the lease progresses, says Studley.
During real estate recessions of the past 50 years, owners learned to acknowledge Studley and tenant rep brokers.
"One time we negotiated a lease, and the owner called us up and thanked us," recalls Jacque Ducharme, president of the company. "We said, `We just negotiated your lease from $12 to $8 a square foot. You just lost one-third.' He said, `Yes, but I would've lost a tenant if you hadn't told me what to do.'"
In the early-1990s, lean times for developers and owners were a boon to the tenant representation side, as commission began rolling in for renewed leases.
"That recession changed the brokerage business because you could make money in both directions," says Studley. "It worked very well for us. We were able to fulfill the needs of a lot of tenants, reduce their rents and also create financial packages that enabled the owners to show their lenders a cash flow that was at least sufficient to maintain ownership of the building."
Studley also blazed a trail in the 1960s, opening offices in Chicago and Washington, D.C. Studley's peers in New York wondered why the company would look to other markets. Competitors in Studley's new markets, Chicago in particular, were not happy to greet new competition. In Chicago, a group of established firms worked to remove Studley's license, citing the company's "New Building Book" as a violation of Illinois' brokerage laws. Of course, the tactic failed, and the one-time competitors are no longer in business.
While Studley is not always happy with the perception of his brokers' exceptionally aggressive nature, ruffling some feathers is only natural. Intelligence and a high energy level yield a company that Studley admits, "I wouldn't want to compete against."
"I've always been in a new market," he says. "Everything we've done has been in a new market because we started from nowhere. That's something you have to live with.
"There's no question that it does ruffle some feathers, particularly for the competitors, but rarely for the owners or tenants because the more services for them, the better. Wherever we've been in business for a while, we have a terrific relationship with the real estate community and the business community."
The insiders A 28-year veteran of the company, Jacque Ducharme took the helm as president at the beginning of this year after splitting time between Studley's Chicago office, where he had been branch manager since the mid-1970s, and the Office of the President in New York. Studley established the Office of the President as the 1990s wound down to create an environment where succession was visible. At that time, Studley also flirted with a public offering and mergers and acquisitions, but dropped the idea after taking a hard look at the unrealistic expectations involved in maintaining analysts and Wall Street's favor.
Ducharme assumes his new role as Studley rides a wave of growth and opportunity. The company posted billings of $140 million in 1999, and, at mid-year 2000, was 35% ahead of last year, according to Studley. During the past three years, Studley has opened offices in Atlanta, Dallas and Ft. Lauderdale, Fla., and plans to open an office in Denver by the end of the year. While the company intends to limit growth in some respects - Studley neither wants nor needs offices on every corner in every city - Ducharme and the company definitely have a vision for the future.
"We want a limited number of offices with well-trained people in a cohesive culture that can facilitate transactions across the United States," says Ducharme. "Our main thrust is to grow revenue per consultant, per broker. If we're going to grow, we're going to increase the quality and value of our services provided by each broker."
"Hopefully, that translates into higher earning individuals and a higher income for the firm," he says.
Technology plays an integral part of enhancing the value of Studley's services. Under the guidance of chief information office Jeff Hipschman, Studley has taken a leadership position in technology applications. The company has a number of proprietary technology initiatives and uses the Internet in almost every way conceivable to communicate internally and with clients and as a negotiation tool. Continuously wired, brokers also are equipped with a Blackberry, a pager-sized personal data assistant that allows constant e-mail access.
Of course, clients such as Microsoft, Intel and Compaq have played a role in Studley's technology transformation as well. Microsoft and its high-tech counterparts require their business partners to work in the digital realm. Still, real estate executives at high-tech firms are, first and foremost, real estate people. Today, high-tech companies account for the largest single sector of Studley's business.
"As soon as [high-tech corporate real estate executives] discovered our high-tech capabilities, they started introducing us to their high-tech people who were not real estate people, and then really interesting things began to happen," says Studley. "We started to create products that only a high-tech firm could appreciate."
Studley does not see the Internet and technology as a means to disintermediate brokers.
"Basically, there's a long process involved in gathering the information and analyzing all the factors, but then you have to negotiate a deal," says Studley. "I haven't seen a machine that can do that. Ultimately, it's the transaction that counts.
"Our job is to create an environment so that the best transaction can be done," Studley continues. "I'm pretty confident that nobody's about to take our place in that part of the function. We can be as good as anybody else in identifying ways to use the Internet."
Young guns Like Ducharme, who became Chicago branch manager while in his 20s, Studley executive vice presidents Neal Golden and Richard Schuham and CIO Hipschman - all in their mid-30s - represent Studley's outlook that young executives should be mentored and given every opportunity to prove themselves.
A protege of Studley senior executive vice president Steve Goldstein and vice chairman Peter Speier, Golden joined Studley's Washington, D.C., office in 1990 and was named co-manager of the D.C. office in 1995 before becoming manager of Studley's National Accounts Group in 1996. Golden established Studley's Atlanta office in 1997, leading an aggressive push that has made the company one of Atlanta's most formidable tenant rep firms. Growth in Atlanta lead to the opening of a south Florida office this year. With Ducharme and executive vice president and Chicago co-branch manager Joseph Learner, Golden also was instrumental in opening Studley's Dallas office.
Likewise, Schuham looked at the Denver market two years ago and saw the need for a Studley presence but knew that the timing was not quite right. A year later, he came back to Studley and told him it was time.
"Who would do that?" Studley asks with a laugh. "What kind of company would open an office that way - because someone says we should open an office there? Still, we do a lot of business in these markets before opening an office.
"When it was time to find brokers to join us, they all had heard about us and wondered whether they were going to be on our side or against us when we came into the market in a stronger way," says Studley.
To Golden, the enthusiasm at both ends of the spectrum, from senior executives to junior brokers, is almost scary.
"Sometimes with young people, companies tend to keep their thumb on them and not allow them to maximize their potential," says Golden. "To me, one of the most exciting things about this company is that there is a group of senior level people who don't stand in your way. They give you enough rope, but at the same time allow you, with great counseling and guidance, to help them move the business forward.
"What sets Studley apart not only in the Southeast but as a national organization is that executives at this company are devoted to giving the consultants state-of-the-art training, state-of-the-art tools, all the things necessary to add value not only in helping our business but with the implementation process as well," he adds. "That's what creates an exceptional company."