In the niche of the commercial real estate world that focuses on representing tenants and end users, the recent wave of consolidations at large brokerages is causing concern that the negotiating table is tipped further in favor of landlords and sellers.
In a little over a year, Savills, DTZ and Colliers have acquired or been in talks to buy Studley, Cushman & Wakefield and RKF, respectively. That’s on top of consolidations in earlier cycles producing behemoths like CBRE, Newmark Grubb Knight Frank and JLL.
With the global companies getting bigger and more global, more than a dozen boutique tenant-representation brokerages in 23 cities have formed a new network they say gives tenants a stronger hand at the negotiating table.
“With the ever-changing and challenging nature of the commercial real estate market, tenants are relying, more than ever, on the advice of independent, conflict-free advisors for their space decisions,” said Jim Coleman of Hanley Advisors, one of the city’s under-the-radar dealmakers and a founding member of the tenant-rep organization Exis Global.
“Being small and independent allows us to act as a buffer between the big firms,” added Coleman, who was a top producer at Cushman & Wakefield when he left more than a decade ago to start his own firm.
While Coleman may not be a household name, he is well known in brokerage circles, and his resume includes representing Richemont last year in the $700 million sale of its St. Regis Hotel retail condo to Vornado Realty Trust and Crown Acquisitions.
Exis Global includes 15 tenant brokerages in cities like New York, Chicago, Los Angeles and Shanghai working together to give their clients more leverage.
Exis member Glen Blumenfeld, a principal at the boutique brokerage Tactix in Philadelphia, said tenants can get lost in the mix at the larger firms.
“When you go to the websites of these large, full-service firms there’s place on the website that talks about what they can do for their tenants and there’s a place that talks about what they can do for their landlords,” said Blumenfeld, whose company recently represented a 275,000-square-foot anchor tenant in one of Philadelphia’s newest mixed-use office towers, Cira Centre South.
“One says they’ll get the lowest rental rates possible; the other says the highest rates possible,” he added. “Well, that’s great in theory, but what happens when they’re both sitting at the negotiating table?”