If it's true that records are meant to be broken, then certainly that was the case in 2006 when commercial property sales soared to ever-increasing heights, taking the nation's brokerage industry along for the ride. Investment sales nationwide topped a whopping $317 billion in 2006, a 15% increase over 2005 sales volume of $270 billion, according to New York-based Real Capital Analytics, which tracks deals $5 million and higher.
Leasing activity also rose as the national office vacancy rate declined to 13.6% at the end of 2006, down from 14.6% a year earlier, reports Chicago-based Grubb & Ellis. At the same time, new construction was largely held in check as a host of private equity and foreign investors plowed capital into existing properties.
While office buildings have proven to be hot commodities, the largest commercial property sale in history occurred in 2006 — an apartment complex. Peter Cooper Village/Stuyvesant Town, a 110-building complex located on the east side of Manhattan, sold for $5.4 billion to New York-based Tishman Speyer Properties and partner Blackrock Realty. CB Richard Ellis represented MetLife as the seller and closed the deal in 30 days, thanks to anarrowly targeted auction.
CB: King of the Hill — again
That New York deal, and others like it, helped Los Angeles-based CB Richard Ellis retain the top spot on NREI's annual top brokerage survey for the fourth consecutive year. In 2006, CBRE racked up a total of $224.6 billion in combined leasing and investment sales globally, up 33% from its $150.4 billion total in 2005 and nearly $100 billion higher than its 2004 volume of $127.4 billion. But not all of that growth was organic, since those totals include full-year volume for Dallas-based Trammell Crow Co., which CBRE acquired in December 2006.
Still, CBRE's $65 billion in lease transaction volume was more than double that of its nearest competitor, Cushman & Wakefield, which recorded $32.6 billion in lease deals. Christopher Ludeman, president of CBRE's brokerage operations in the Americas and a 25-year veteran of the firm, cites the continued national economic recovery for fueling both job growth and corporate expansion. As Ludeman puts it, “The occupier is back.”
A major shakeup juggled several other leading players. Chicago-based Jones Lang LaSalle jumped ahead of perennial No. 2, New York-based Cushman & Wakefield. JLL had ranked 6th in total leasing and sales volume in 2004 and 2005, but the difference was its 2006 investment sales volume of $70.9 billion, which accounted for 90% of its brokerage business.
“Our competitive set tends to be very brokerage led,” says Bill Krouch, CEO of investor services at Jones Lang LaSalle. “[But] it really is about the broad array of services and how we integrate them.”
Chicago-based Grubb & Ellis, another stalwart firm, dropped out of the top 10 for the first time in years, from fifth place in 2005 to 12th place in 2006.
Core values rising
As service providers look ahead to 2007 and 2008, they know it will be hard to top their record gains in 2006. For the first time in years, robust leasing activity is yielding upside for property owners, who can ratchet up rents in the face of little new supply and higher property values.
That helps explain why in February The Blackstone Group, based in New York, shelled out some $39 billion — including debt assumption — for Chicago-based Equity Office Properties Trust. Blackstone already has begun selling off pieces of the 108 million sq. ft. office portfolio.
And where there is a breakup, again there are brokers, points out Krouch of Jones Lang LaSalle. “For a service company, those are opportunities.”
Ben Johnson is a Texas-based writer.
| Property | Market | Price | Cap Rate (%) | Buyer |
|---|---|---|---|---|
| Peter Cooper Village/Town | Manhattan | $5.4 billion | 3.2% | Tishman Speyer/Stuyvesant Blackrock Realty |
| Mall of America Minn. | Bloomington, | $1.8 billion | 6.6% | Triple Five Group Center* |
| 666 Fifth Avenue* | Manhattan | $1.8 billion | 6.6% | Kushner Cos. |
| 1211 Sixth Avenue | Manhattan | $1.52 billion | 5.3% | Beacon Capital Partners/Lehman Brothers |
| Source: Real Capital Analytics | ||||
| * tie | ||||
| Building | Market | Lease (sq.ft.) | Tenant | Tenant Rep |
|---|---|---|---|---|
| Four Allen Center | Houston | 1.24 million | Chevron | Cushman & Wakefield of Texas |
| Blue Cross & Blue Shield of Texas | Dallas | 980,000 | Blue Cross & Blue Shield of Texas | The Staubach Co. |
| 7 World Trade Center | New York | 589,945 | Moody's Corp. | Cushman & Wakefield |
| Source: CoStar Group | ||||
TOP 25 BROKERAGES
The Top 25 Brokerages listing is based on responses to NREI's Top Brokerage survey, which was conducted via e-mail in February and March 2007. Brokers were asked to provide the total dollar value of leasing transactions and investment sales globally in 2006. The totals were combined to determine the company's ranking. NREI makes every attempt to ensure the final survey is as comprehensive as possible, but some brokerages may choose not to participate.
- CB Richard Ellis
Total amount of investment sales and leasing transactions: $224.6 billion
100 N. Sepulveda Blvd., Suite 1050
El Segundo, CA 90245
Email: [email protected]
Web site: www.cbre.com
Officers: Brett White, President/CEO; Ken Kay, CFO; Cal Frese, President, Americas - Jones Lang LaSalle
Total amount of investment sales and leasing transactions: $78.6 billion
200 E. Randolph
Chicago, IL 60601
Phone: (312) 782-5800
Email: [email protected]
Web site: www.joneslanglasalle.com
Officers: Colin Dyer, President/CEO; Lauralee Martin, COO/CFO; Peter Roberts, CEO, Americas - Cushman & Wakefield
Total amount of investment sales and leasing transactions: $76.9 billion
51 W. 52nd St.
New York, NY 10019
Phone: (212) 841-7500
Email: [email protected]
Web site: www.cushwake.com
Officers: Bruce Mosler, President/CEO; John Santora, COO; John Cushman, Chairman of the Board - Colliers International
Total amount of investment sales and leasing transactions: $59.1 billion
50 Milk St.
Boston, MA 02109
Phone: (617) 722-0221
Email: [email protected]
Web site: www.colliers.com
Officers: Margaret Wigglesworth, President/CEO; David Kahnweiler, Chairman; Margaret Kemp Carlson, COO - NAI Global
Total amount of investment sales and leasing transactions: $42 billion
4 Independence Way
Princeton, NJ 08540
Phone: (609) 945-4000
Email: [email protected]
Web site: www.naiglobal.com
Officers: Jeffrey Finn, President/CEO; Gerald Finn, Founder/Chairman; Richard Kimball, EVP, U.S. Brokerage Operations - Newmark Knight Frank
Total amount of investment sales and leasing transactions: $37.3 billion
125 Park Ave.
New York, NY 10017
Phone: (212) 372-2000
Email: [email protected]
Web site: www.newmarkkf.com
Officers: Barry M. Gosin, CEO; James D. Kuhn, President; Jeffrey R. Gural, Chairman - ONCOR International
Total amount of investment sales and leasing transactions: $31.4 billion
1 Campus Dr.
Parsippany, NJ 07054
Phone: (973) 407-6363
Email: [email protected]
Web site: www.oncorintl.com
Officers: David Matthes, President/CEO - The CORE Network
Total amount of investment sales and leasing transactions: $27.9 billion
15150 Preston Rd., #300
Dallas, TX 75248
Phone: (972) 980-3994
Email: [email protected]
Web site: www.corenetwork.org
Officers: F. Keene Miller, Chairman of the Board; Frank Buckley, Vice Chairman; Edward A. Cross II, Chairman Emeritus - GVA Worldwide
Total amount of investment sales and leasing transactions: $26.5 billion
1569 Sherman Ave., Suite 201C
Evanston, IL 60201
Phone: (847) 733-0883
Email: [email protected]
Web site: www.gvaworldwide.com
Officers: Michael Corbett, President/CEO; Michael T. Cohen, Chairman; Betsy Baer, Executive Director - The Staubach Co.
Total amount of investment sales and leasing transactions: $26 billion
15601 Dallas Pky., Suite 400
Addison, TX 75001
Phone: (972) 361-5000
Web site: www.staubach.com
Officers: Roger Staubach, Chairman/CEO; Elysia Ragusa, President/COO; Bill Leiser, CFO - Studley Inc.
Total amount of investment sales and leasing transactions: $25.4 billion
300 Park Ave., 3rd Floor
New York, NY 10022
Phone: (212) 326-1000
Web site: www.studley.com
Officers: Mitchell S. Steir, Chairman/CEO; Michael D. Colacino, President; Stephen B. Goldstein, Vice Chairman, U.S. Operations - Grubb & Ellis Co.
Total amount of investment sales and leasing transactions: $25.3 billion
500 W. Monroe St., Suite 2800
Chicago, IL 60661
Phone: (312) 698-6700
Email: [email protected]
Web site: www.grubb-ellis.com
Officers: Mark Rose, CEO; Maureen Ehrenberg, President, Global Client Services; Robert Osbrink, President, Transaction Services - TCN Worldwide
Total amount of investment sales and leasing transactions: $20.8 billion
2419 Coit Rd., Suite A
Plano, TX 75075
Phone: (972) 769-8701
Email: [email protected]
Website: www.tcnworldwide.com
Officers: Ross Ford, President/CEO; Neil Siderow, Chairman; David Wagner, Vice Chairman - Marcus & Millichap Real Estate Investment Services
Total amount of investment sales and leasing transactions: $20.5 billion
First Financial Plaza
16830 Ventura Blvd., Suite 352
Encino, CA 91436
Phone: (818) 907-0600
Email: [email protected]
Web site: www.MarcusMillichap.com
Officers: George M. Marcus, Chairman; William A. Millichap, Co-Chairman; Harvey E. Green, President/CEO - Coldwell Banker Commercial Affiliates Inc.
Total amount of investment sales and leasing transactions: $15.3 billion
One Campus Dr.
Parsippany, NJ 07054
Phone: (800) 222-2162
Email: [email protected]
Web site: www.ColdwellBankerCommercial.com
Officers: Rick Davidson, President/COO; Fred Schmidt, SVP, Business Development; Paul VanDevender, VP, Strategic Development - Sperry Van Ness
Total amount of investment sales and leasing transactions: $10.9 billion
18881 Von Karman Ave., 8th Floor
Irvine, CA 29612
Phone: (949) 250-4100
Email: [email protected]
Web site: www.svn.com
Officers: Mark Van Ness, Co-Founder; Rand Sperry, Co-Founder; Jerry Anderson, President, National Advisor Organization - Holliday Fenoglio Fowler (HFF Inc.)
Total amount of investment sales and leasing transactions: $10 billion
2000 Post Oak Blvd., Suite 2000
Houston, TX 77056
Phone: (713) 852-3500
Email: [email protected]
Web site: www.hfflp.com
Officers: John H. Pelusi Jr., Director and CEO; Gregory R. Conley, CFO; Nancy Goodson, COO; Mark Gibson, founding partner and currently Director of HFF; Joe B. Thornton Jr., Director of HFF - Apartment Realty Advisors
Total amount of investment sales and leasing transactions: $8.4 billion
1575 Northside Dr., Building 100, Suite 150
Atlanta, GA 30318
Phone: (404) 495-7300
Email: [email protected]
Web site: www.ARAusa.com
Officers: Derrick Bloom, Chairman; Richard Robinson, President; Lisa Robinson, COO - Transwestern
Total amount of investment sales and leasing transactions: $7.7 billion
1900 W. Loop South, Suite 1300
Houston, TX 77027
Phone: (713) 270-7700
Email: [email protected]
Web site: www.transwestern.net
Officers: Robert Duncan, Chairman; Larry Heard, President/CEO; Mark Doran, COO - Century 21 Real Estate LLC
Total amount of investment sales and leasing transactions: $4.9 billion
1 Campus Dr.
Parsippany, NJ 07054
Phone: (877) 221-2765
Email: [email protected]
Web site: www.century21.com
Officers: Tom Kunz, President/CEO; Bev Thorne, SVP, Marketing; Ken Toumey, VP, Brand Management - Voit Commercial Brokerage
Total amount of investment sales and leasing transactions: $3.2 billion
21700 Oxnard St., Suite 350
Woodland Hills, CA 91367
Phone: (714) 978-7880
Email: [email protected]
Web site: www.voitco.com
Officers: Robert D. Voit, President, The Voit Cos.; David Allison, EVP/COO, The Voit Cos.; John M. Owen III, SVP/Managing Partner, Voit Commercial Brokerage's Anaheim Metro & Las Vegas offices - Molinaro Koger Inc.
Total amount of investment sales and leasing transactions: $3.1 billion
1676 International Dr., Suite 575
McLean, VA 22102
Phone: (703) 760-9600
Email: [email protected]
Web site: www.mkhotels.com
Officers: Robert T. Koger, President - PM Realty Group
Total amount of investment sales and leasing transactions: $2.75 billion
1000 Main St., Suite 2400
Houston, TX 77002
Phone: (713) 209-5800
Email: [email protected]
Web site: www.pmrg.com
Officers: Rick Kirk, CEO; Jimmy Gunn, President, Property Services; Roger Gregory, CFO - Massey Knakal Realty Services
Total amount of investment sales and leasing transactions: $2.1 billion
275 Madison Ave., 3rd Floor
New York, NY 10016
Phone: (212) 696-2500
Web site: www.masseyknakal.com
Officers: Robert Knakal, Chairman/Founding Partner; Paul Massey, Jr., Founding Partner; John Ciraulo, CEO - Mid-America Real Estate Group
Total amount of investment sales and leasing transactions: $1.65 billion
One Parkview Plaza, 9th Floor
Oakbrook Terrace, IL 60181
Phone: (630) 954-7330
Web site: www.midamericagrp.com
Officers: Michael D. George, President; Stanley Nitzberg, Principal; Rick Drogosz, Principal