Pike Rowley, principal and managing director of Avison Young Florida, has been in commercial real estate for more than 30 years. Now, as the head of Florida, he has grown the company rapidly through acquisitions.
Rowley, a Coral Gables native, sat down with The Real Deal to discuss his role at Avison, the Abood Wood Fay transaction, and how he incorporates tennis into real estate.
How did you get into real estate?
I started my career teaching tennis in country clubs right out of college. From there, I got into the real estate business a little over 30 years ago. I wanted to get out of teaching tennis (in Palm Beach, Columbus, Ohio and South Florida).
My State Farm agent was investing with a group that was acquiring office centers. The portfolio grew to a point where they needed to hire someone to acquire, lease, manage, sell. And that’s how I got into the business, from a principal’s viewpoint as opposed to a brokerage. I opened my own company (Property Trust) and ended up selling it to Armando Codina and Jeb Bush.
Tell me about Avison Young’s expansion into Florida.
In Florida, Avison Young has only been in existence since October 2012. Thirty of us came from Flagler. A little over two years later, we’re up to 150 people in six offices, plus satellites. We’ve expanded very rapidly in a short period of time.
The first move we made was acquiring a group of veteran brokers in West Palm Beach called WG Compass. We inherited a significant property management company from them. The next move was over in Tampa with the Lane Witherspoon & Carswell acquisition, a group of office-industrial brokers and also a significant property management group. After that was Morrison Commercial Real Estate, primarily office-industrial, in Orlando.
The most significant acquisition was this past December with Abood Wood Fay. They had a significant brokerage and property management — a major service line for us.
We came from Flagler with 3 million square feet of property management assignments. Today, we have 12.5 million square feet. We’ve grown the brokerage platform, but right along with that there’s been a deliberate strategy to go along with that.
It’s a deliberate strategy that starts with the CEO of the company. Six years ago, you had a Canadian-based firm with 11 offices and about 300 people. They hired a CEO, Mark Rose, who created an architectural plan to grow into the U.S. and Europe. The plan was basically to put the ownership in the hands of the brokers and the property managers who were servicing the clients.
What’s different about Avison Young from other companies is that typically the ownership is passive — people who are not in the boat rowing the boat, rather on the sidelines — in publicly traded companies or those owned by funds.
Avison Young is owned by the people who are actually in the business. So, the mission was, let’s expand the company and speak to veteran real estate brokers who have already worked for the national companies owned by passive investors. Let’s give them an opportunity to become shareholders. The company is driven by the decision makers, and that’s really the success of the growth.
How did you get to Avison?
There were eight of us at Flagler who felt like we wanted to finish our career with a wealth creation strategy. Most brokers wake up every day, service clients, get fees, pay taxes and live their life that way. And what they’ll typically do when they’re successful is they’ll go out and invest in real estate and, usually, not do too well because they can’t keep an eye on it and be a broker at the same time.
When you’re a commercial real estate broker, you basically have two choices. One, own your own company. The good news there is you get to keep 100 percent of the fees. If it’s successful, it takes your eye off servicing the clients. The other option is to go work for a national company and not own a piece of the company and be a day laborer.
And the third option now is Avison Young where you can have a national presence, the firepower of a national company and be a shareholder.
What are the challenges that come along with that?
The challenges are that you have your hand in making policy. So you’re going to have to devote time to attending meetings, conference calls and having a voice to how the company is run.
How did the Abood Wood Fay acquisition happen?
Donna Abood and Michael Fay have been in the South Florida market for 25 to 30 years. I’ve known them both personally. We’ve transacted together over the years and we’ve been watching each other from afar. They have a very robust investment sales practice that we were looking for. We acquired them Dec. 1. Abood Wood Fay had 30 brokers and about 50 employees. About half of the brokers decided to go with the Colliers parent.
It was the biggest acquisition we’ve made and you would expect it to be because Miami’s the largest marker. In a national comparison, we’re the second largest behind Washington, D.C. What’s really interesting about what we’re doing is that we’re merging cultures. We’re all entrepreneurs and that goes all the way to the executive level. One of the most important things they said to me (during the Flagler acquisition) was: “We know you know how to do what you do very well. We don’t need to be looking over your shoulder. Be an entrepreneur and go.”
That’s the same message I send to Michael and Donna as well as the West Palm, Orlando and Tampa folks. At the end of the day, it’s a pretty robust and efficient company. All these folks were used to owning their own companies. I didn’t do that well with people coming in with a billy club and hitting me over the head and telling me: “This is how we do things.” Brokers have a hard time with that.
Any details on the acquisition?
All I can share with you is that you’re not writing a check for the value of the company. The first thing you do is create a valuation of the company — basically using three buckets of funding: cash, stock and an earn-out.
What are you focusing on post-expansion?
We pretty much have a flag of every city we want to be in. So now, it’s a matter of filling in the service lines. Orlando, for example, is primarily an office-industrial leasing service group. We want to come in there with retail brokers, more investment sales brokers. So we need to fill in some of these cities with all of the service lines through recruiting. One area where we want to focus on is tenant rep. Most of our business right now is focused on the landlord side of the equation.
One of the most important roles of mine is to create a link between the various offices we have. As a region, we’re Avison Young Florida. It’s not Avison Young Miami or Avison Young Fort Lauderdale. It’s Florida. We come together on a very frequent basis. We’re constantly collaborating on clients, deal flow and that’s where I think we’re different from a lot of companies. We have one database of clients that all of the partners and brokers are able to view and collaborate on. That’s very unusual in our business. A lot of that information is under lock and key in other shops. It’s just an industry tradition. There’s a vested interest in seeing your fellow broker or your fellow property manager do well and that starts with sharing information.
What is the culture like in this boutique firm? That’s one of the first things we look for. How have they hand-picked their brokers and how do they act on a day-to-day basis?
I do keep an eye out for athletes and military. If there’s a background there, I notice there’s a propensity for discipline. It comes in handy when clients are avid tennis players.
Are you good?
I always won the warm-up. My wife, Laurie Fleming Rowley, was a pro tennis player. She’s the athlete.