Regional Firms
Form Alliances
GVA Worldwide, a partnership of independent regional commercial real-estate brokers, is proving that consolidation at the top of the industry will send firms scrambling to join forces.
GVA continues to sign up midsize regional firms seeking to have global reach but remain independent. GVA is expected to announce soon that it is expanding its U.S. presence with GVA Smith Mack in Philadelphia. The partnership is expanding its Asia presence with the addition of Asia Pac, which is a Pacific Rim firm, and Integral, the dominant player in Shanghai. The firm also will add a yet-to-be-named top player in Southern California soon. The latest expansion follows the additions earlier this summer of Kidder Mathews, the top firm in Seattle, and VCI Consulting of India.
The movements come at a time when firms in the commercial real-estate services business need to get big, or become small and specialized. Otherwise they're in peril from industry consolidation. In July, the largest firm in the world, CB Richard Ellis, acquired the third-largest firm, Insignia Financial Group, to create a global firm of unprecedented scope.
"Those of us that were the best regional players realize we can no longer afford to be leading lights of our own network organizations," says Michael Cohen, chief executive of GVA Williams in New York, and the network's vice chairman.
Regional firms used to having independence and a large share of their market are finding there is a third way, somewhere in between joining a large, international corporation and being a boutique. Some have simply been bumped out of partnerships by CBRE and Insignia's overlap. GVA Kidder Mathews was an Insignia strategic partner before the merger, and CB was its direct competitor.
"We wanted to remain independent and keep our very entrepreneurial environment and culture instead of an institutional cultural environment," says Jeffrey Lyon, GVA Kidder Mathews president and CEO.
A CB Richard Ellis spokesman says the company's major presence in Seattle made it unnecessary for either party to continue the affiliation.
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