When Chicago-based brokerage Cresa’s board decided it was time to accelerate growth, it didn’t just look for a new CEO, but searched outside the insular club of commercial real estate.
Ray Anderson’s appointment earlier this year marks a departure from his predecessor, Tod Lickerman, a traditional CRE heavyweight who previously ran global brokerage empires at DTZ, Cushman & Wakefield and JLL. Anderson, however, is a former EY-Parthenon partner and consulting executive for tech services who comes armed with a playbook built on mergers, acquisitions and raising capital, not old-school rolodexes full of landlords and brokers.
Cresa brought him on to scale.
His first major salvo is the rollout of Cresa Core, an AI-powered technology platform meant to guide tenants’ lease administration, accounting and site selection decisions, as well as provide insights on labor analytics essential to clients’ needs and uses for real estate, among other functions.
Beyond deploying new tech, Anderson is executing a growth strategy fueled by North American acquisitions and some traditional poaching of top-producing brokers from rival behemoths like CBRE and JLL. He spoke with The Real Deal about his outsider’s transition into commercial real estate, how he plans to raise more capital to expand the brokerage and his acquisitions strategy.
This conversation has been edited and condensed for clarity.
TRD: Cresa has a strict, tenant-and-occupier-only model for its client base. Could that focus ever change?
Anderson: No. We think it’s a massive point of differentiation. Clients fundamentally understand the potential and actual impacts of conflicts of interest in the marketplace, and they are reacting accordingly.
TRD: Given the structural changes and commission scrutiny we’ve seen in the residential real estate sector recently, do you feel those conversations are bleeding into the commercial side and driving occupiers toward models like your firm’s?
Anderson: I don’t see how it couldn’t. Sophisticated real estate users understand the inherent conflicts. When you throw a little bit of gasoline on the fire — which is all the public pressure and news surrounding what has happened in other real estate sectors — it’s absolutely going to impact a client’s decision-making.
TRD: On the recruitment side, how do you pull top-producers away from giant competitors like CBRE or JLL where some would say conflicts exist?
Anderson: To be honest, we don’t lead with the conflict issue when recruiting, because that is typically a client-side concern. When a broker wants to leave a competitor, they are usually unhappy with bureaucracy, a lack of opportunity or the firm’s culture.
We just hosted our spring meeting and brought a number of potential recruits out. If you can make more money and be a happier person, that’s a pretty good trade.
TRD: Looking at the different asset classes — office, industrial, retail — where is Cresa’s business concentrated today, and where is the growth coming from?
Anderson: Industrial and data centers make up the largest segment of our business right now. The office sector is still big, and while retail is currently the smallest of the three, it is growing very quickly. Our new tech tools are built so an advisor can easily switch instructions to focus on retail, office or industrial seamlessly.
TRD: You are just a few months into your role as CEO, and Cresa is rolling out Cresa Core. Walk us through how that came together and what it means for the firm.
Anderson: Pretty much right from week one, I was deeply interested in looking at our technology. On my fifth day, I had a call with our [chief technology officer], and it was clear they had built a very thoughtful base of enterprise-level database and visualization tools.
We have a foundational portfolio management and database layer. Second, we have about 15 proprietary tools up and running now — like lease abstraction, market research and lease analysis — where advisors push a button, input information and get an immediate output to win business and do daily work.
Around day seven or eight, we kicked off a rebranding project to bring it all together. Now it’s a unified offering with updated user interfaces that connects with a client’s existing planning or accounting systems. Even though it’s been out for less than a month, we already have 30 to 40 percent of our workforce actively using it.
TRD: Your background is rooted in M&A, raising capital and technology companies rather than traditional CRE. How has that shaped your approach to leading Cresa?
Anderson: People told me coming in that the industry was a little bit behind in terms of technology. I’ve seen technology implementations that work and those that don’t.
When I approached this, I brought the toolsets I’ve used throughout my career. A lot of what we’ve done has focused on practical, non-abstract training. We get a broker on a call who has a daily problem, show them our solution and let them explain in normal words why it’s good for them.
TRD: Did you take the helm with the goal of aggressively acquiring more firms or preparing Cresa to be acquired?
Anderson: No, we’re not preparing to be sold. We are looking at this strictly as a growth play. We are using two avenues to grow: We are very aggressive in recruiting successful brokers from competitors, and we are very active in M&A throughout North America.
The firm had acquired a number of groups that brought in disparate types of technology and data. That was the accelerant. Our focus has been on the integration piece.
TRD: Cresa is currently privately held and effectively employee- and broker-owned, similar to a law firm partnership. Are there any plans to take the company public or shift the ownership model?
Anderson: The vast majority of our ownership is held by key producers and people actively running the business, which ensures our future is directly tied to our key employees. I don’t see that changing dramatically. The board spent a year in a deliberate search process looking for someone outside the traditional industry mold to accelerate growth, which is how I stepped into the role.
Now, I’ve taken a company public before and I’ve done tons of deals. There are plenty of opportunities out there to bring in additional capital to accelerate our growth. A short-term IPO is not on the table, but we are open to different alternatives with the right partner, at the right time and with the right structure. We have no internal pressure or urgency to act.
TRD: How much capital, short-term, would you be looking to raise to help accelerate that growth?
Anderson: I haven’t even told our investment bankers that, that’s something you can’t talk about in public until you’re much further along.
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