Top commercial firms such as Cushman & Wakefield and Jones Lang LaSalle are looking outside the brokerage business to find replacements for recent high-profile executive exits.
Cushman was hit with a slew of departures in recent months, including CEO Glenn Rufrano’s in June. Earlier this month, Lauralee Martin, JLL’s CEO for the Americas, announced she was moving to Health Care REIT, a company that owns medical properties.
Their replacements are unlikely to come from commercial brokerage, the Wall Street Journal reported — a symbol of how as firms’ growth is now coming from non-traditional businesses, such as “corporate services.”
Corporate services, a catch-all that refers to advising large companies on matters ranging from how to effectively utilize their space to how to best relocate, is increasingly important to the brokerage businesses.
Indeed, corporate services made up 34 percent of CBRE Group’s revenue in 2012, up from 23 percent in 2007, Barclays Capital’s Ross Smotrich told the Journal. Significant growth in that business segment has also been seen at Cushman and JLL, according to Smotrich.
Traditionally, top jobs at such firms would go to the biggest dealmakers in the firm, such as Bruce Mosler, who led Cushman for many years, and CBRE’s current tri-state region CEO Mary Ann Tighe.
Execs are now also likely to jump in after coming up specializing in finance or management, not straight-ahead brokerage, the Journal said. Colin Dyer, the CEO of JLL, who ascended in 2005, worked at consulting firm McKinsey and Co. before taking the brokerage’s helm.
“What this tells us is that the skill set of a person needed to run one of these businesses is not endemic to somebody who grows up in the business,” William Ferguson, the co-chairman and co-CEO of real estate headhunter FPL Advisory Group, told the Journal. [WSJ] – Hiten Samtani