Studley in expansion talks, execs say

Mar.March 03, 2010 12:22 PM
From left: 399 Park Avenue, the site of Studley’s soon-to-be headquarters, and Michael Colacino and Mitch Steir

As it prepares to move to its new Midtown headquarters next month, tenant representative advisory firm Studley is kicking tires at approximately six companies to see which ones would make for a good acquisition or joint venture partnership that could be worked out before the end of the year, the firm’s top executives said.

“We have about a half a dozen different companies we are looking at right now about doing some sort of deal. Not all are acquisitions,” company president Michael Colacino told The Real Deal in an exclusive interview last week.

The company is looking to grow in the areas of brokerage, project management and real estate investment banking and is eyeing companies with a presence in New York City, Colacino said.

In the interview with The Real Deal, Colacino and company chairman and CEO Mitchell Steir discussed the various paths of growth the firm is considering. The company is scheduled to move its headquarters April 23 to 399 Park Avenue from 300 Park Avenue where it will have the floor capacity to grow by approximately 60 percent from the 136 professionals now.

While they were not specific about their plans, some form of agreement is likely to be completed by the end of 2010.

“There will be something happening this year that will be news of note,” Steir said.

The company’s last major expansion was the joint venture with Paris-based AOS in 2006, to form AOS Studley.

Studley, with offices throughout the United States and in London as well as the AOS partnership, was founded in 1954 by Julien Studley. Company principals Steir, Colacino and took control of the firm through a buyout in 2002. Jaccom left in 2006 for what is now FirstService Williams, where he is CEO.

In a period of steep losses for commercial real estate, several brokerage firms have publicly been bullish about expansion plans, including Cassidy Turley, FirstService Williams and UGL Equis.

While only the coming years will show whose boasts were justified, Studley, for its part, had more transactions than any of those firms on CoStar’s list of 2009 top 50 leasing deals published in Crain’s last month.

Studley’s revenues have been nearly flat for the past two years. In 2009, the company took in $282 million, down slightly from the year earlier, when it had revenues of $288 million, a company spokesperson said. Those years were down from the company high of $304 million in 2007. In 2006, the company had less revenue with $272 million.

Colacino said the company remained financially healthy in the downturn, even increasing profits last year on a slight decrease in revenue, but as a private company his characterizations could not be verified.

Colacino said Studley was looking at three areas in which to grow.

“We are looking at tenant rep companies, small regional tenant rep companies not affiliated with our large competitors. And we are also very interested in project management companies, so we are talking to [project management] companies that could be conceivably merged into us,” Colacino said. “The third thing we are looking to expand is real estate investment banking.”

Brokers mentioned two well-known independent tenant rep firms in New York, the Vortex Group and Byrnam Wood, but Colacino said through a spokesperson that Studley was not in talks with them.

Stephen Siegel, chairman of global brokerage at commercial services firm CB Richard Ellis, said in an e-mail he was not aware of which firms Studley could be speaking with, but added, “The [New York] companies left without having been acquired or being too large are limited.”

Colacino said Studley was seeking to grow in investment banking because the industry was changed by the dissolution of real estate lenders such as Lehman Brothers, leaving the market for deals less than $100 million underserved. Studley already provides investment banking services, but wants to increase its presence.

There is a “gap at the bottom [of the market] where there is an opportunity for people to enter,” Colacino said. “We are going to be doing more and more real estate investment banking and that is going to be a big part of the expansion plans.”

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