Canadian commercial brokerage looks to open shop in Manhattan

TRD New York /
Jun.June 02, 2011 05:29 PM

One of the largest independent commercial property firms in Canada that has been on an
expansion burst in the United States over the past 18 months is talking with brokers in
Manhattan and plans to announce it will open an office here this fall.

The full-service Toronto-based company, Avison Young, has a modest presence in the
U.S. but plans to take a chance in the nation’s largest property market.

Founded in 1978, it now has 23 offices in Canada and the United States, and in the past
few years has grown from 290 to 750 people, the company said.

“We are quite comfortable that our strategy, momentum, differentiated client service
model and compensation system will result in a robust New York office in the very near
term,” Mark Rose, company chairman and CEO, said in an email. The firm expects to
announce hirings in Manhattan “around the end of the third quarter.”

Although insiders said the current weak economy made it relatively easier to recruit
brokers — and it helps that Rose was COO at Jones Lang LaSalle and later CEO of Grubb
& Ellis — the main challenge for the firm is that it’s up against entrenched companies
with decades of experience in Manhattan.

“The question is what do they do that [Cushman & Wakefield], [CB Richard Ellis] and
others don’t do,” Barry Hersh, a clinical associate professor at New York University’s
Schack Institute, said. “It is far from easy, [but] this is a human capital business. It is all
about the people you hire.”

He added, “The best news is for the brokers, because now there is another potential
bidder for their services.”

Avison Young opened its first U.S. office in 2009, in Chicago, which was followed by
others in Washington, D.C., Houston, Atlanta and elsewhere. Approximately 150 of its
employees are in the United States, Rose said.

Brokers have been swapping shops in recent years. Most dramatically in recent months
was when JLL poached five top leasing brokers and additional support staff from
Cushman & Wakefield in January.

Yesterday, Avison Young announced it hired four brokers from Grubb & Ellis’s Chicago
office. Grubb & Ellis is in a difficult financial position, having burned through about $26
million of cash in the first quarter documents filed with the U.S. Securities and Exchange
Commission show. On Tuesday, the company announced Colony Capital, which had injected $18 million
into Grubb & Ellis through a credit facility loan in April and May, walked away from
its exclusive opportunity to buy or finance the company
, although talks remain ongoing,
Grubb said.

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