In 2009, the multifamily sector saw historically low transaction. This year, things have been better, but are still bad.
As the sales pace ground to a halt in most markets around the country, those people marketing and selling the apartments had nothing to do other than change jobs.
For instance, in the past year, Seattle-based Colliers International has added known multifamily producers from other firms such as Andrew Tate as senior vice president of multifamily investments; Bill Hahn as senior vice president of multifamily properties from Sperry Van Ness; and Kitty Wallace as executive vice president.
Though CB Richard Ellis added Mitchell Kiffe after his departure from Fannie Mae, the firm lost veterans to places like Santa Ana, Calif.-based Grubb and Ellis and Chicago-based Jones Lang LaSalle. These are just a few of the moves the brokerage community has seen in the past year.
Most brokerage executives say this reshuffling is just a reaction to the markets. “We’ve seen decreased multifamily brokerage transaction velocity nationally, which means brokers have had fewer deal closings and shallow pipeline,” says Lisa Robinson, chief operations officer for Apartment Realty Advisors. “It’s in this type of cycle that you see a heightened level of broker movement among companies. It’s simply easier for brokers, under these conditions, to make a change with the least amount of disruption to their clients and their book of business.”
But others actually are a little surprised there’s not more movement. “There’s always movement,” says Peter Donovan, senior managing director of Los Angeles-based CB Richard Ellis’ Multi-Housing Group. “Maybe it seems more obvious with the lack of transactions, but relatively speaking, there hasn’t been as much as I would have thought in a market like this.”
Robinson says brokerage firms are also realizing that’s this is a good time to lure talent from struggling competitors. “Everybody that’s coming in is coming from somewhere,” Mulhern says. “At the places they were, they may not have been able to pursue the platform or level of business that they wanted. They’d like to get away to someplace where they can compete better."
That desire was magnified for brokers who had their own shops. ARA, for instance, brought aboard two local brokers. Christopher Bentley, who had ran the Las Vegas-based Bentley Group, and Gail Neuberg, former co-owner and operator of Portland-based Tilbury, Ferguson & Neuburg, came on board to open offices in Las Vegas and Portland, respectively.
“In both of these cases, these local boutique operations recognized the benefit of leveraging an established national platform like ARA’s and that’s the impetus behind much of the brokerage company growth through acquisition you’re seeing in the market today—where smaller, local groups are merging with larger, national players in an effort to remain competitive and to tap into resources and relationships they likely wouldn’t otherwise have access to,” Robinson says.
In hard-hit areas of the country, the difficulty for smaller, independent brokers is amplified. “In Phoenix, there have been a handful of smaller shops that have folded completely or joined ranks with somebody bigger than them,” Mulhern says.
But even when a well-heeled firm makes additions, it, unfortunately, has to make room for the new talent. “We had to move some people out,” says Bob Mulhern, managing director for Collier’s Greater Phoenix region. “We brought in 12 brokers and moved out 10 brokers. That’s just reality today.”