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|Home : Austin : Archive : 2000 : July : Week of July 10, 2000 : In Depth: Commercial Real Estate Report|
Career shuffle affects local real estate firmsCindy Royal Special To The Austin Business Journal
In the past year or so, the switch has been on in Austin's commercial real estate industry.
A hot Austin market, an increased ability to meet clients' needs and lifestyle changes are some of the reasons for career transitions by several high-profile commercial real estate professionals.
Some have moved to new responsibilities within their firms, others have moved to other companies, while still others have ventured out from national firms to launch their own businesses.
Effective July 1, Jerry Lumsden, who had been managing director at CB Richard Ellis in Austin since 1984, switched to being a full-time broker. Last July, Lumsden began doing some brokering along with his management duties. It wasn't long before he realized he wanted to work full time with clients.
"I like dealing with people and providing solutions to their real estate problems," Lumsden says. "I'm at the point in my life that I just wanted to do something different."
Jerry Frey has transferred from CB Richard Ellis in Houston to replace Lumsden.
Lumsden says his responsibilities managing the local CB Richard Ellis office became more tedious once it became a public company. Instead of working with clients, he was spending more time doing reports and forecasting.
"Some forecasts take me three hours to do," Lumsden says. "I don't like that sort of stuff."
Lumsden says he still would be making the move even if market conditions weren't as favorable.
Fueled by a vibrant economy and the influx of high tech companies, the Austin market is enjoying strong activity and momentum. According to Colliers-Oxford Commercial Inc.'s report for the first quarter, the overall rental rate in Austin was up 9.3 percent over the same quarter in 1999 and the occupancy rate remained in the 95 percent-plus range.
"Different markets have different opportunities," Lumsden says. "If the market was really terrible like it was in the mid-'80s, I probably would still do it."
Big deals, big listings
Late last year, broker Helen Jobes joined Trammell Crow as vice president of investment sales after four years with SynerMark Commercial Real Estate Co. Jobes says she made the move to be able to work on bigger deals.
SynerMark since has merged with Beverly Hills, Calif.-based Kennedy-Wilson International, but Jobes says she would have made the decision to move regardless of the merger.
"Trammell Crow is a bigger company than Kennedy-Wilson. We have more offices nationwide, more name recognition and more alliances in the real estate community," Jobes says. "A lot of companies will talk to us first because we can do a lot of things with them through the different stages of company development."
Jobes agrees that a strong market encourages people to make transitions, like going out on their own, but she doesn't have any designs on starting her own firm.
"With what I am doing now, investment sales, I have to be with a big company," Jobes says. "Big deals require big listings."
She does feel, however, that people in certain specialties with the right experience can be successful on their own.
Smaller is better
That's why another Austin broker, Pat Herron -- along with Carl Williams and Wendy Elder -- left NAI/Commercial Industrial Properties Co. in April to open their own shop, herronwilliams LLC. Their decision was primarily customer-driven.
"We thought as a smaller organization, we would be more able to respond to what our clients needed and wanted," Herron says. "We repeatedly heard from our clients that what they needed wasn't found in a larger organization."
The strong Austin market was just a minor consideration in deciding to venture out on their own, and Herron says they would have done so under different market conditions.
"It is easier to start a business in a good market, but having done this for 18 years, you have established clients, and I have been lucky that they have followed me and continue to work with me," Herron says.
Herron says the presence of technology -- specifically email and the Internet -- has allowed her firm to compete on an equal footing with larger companies.
"A number of years ago, there was not a systematized database of buildings that was available to everyone," Herron says. "Now it is a service that anyone can subscribe to."
Herron also says technology has allowed both brokers and clients to keep in constant contact through email, voicemail and mobile phones.
"You are always accessible," Herron says. "Because of the market conditions, if a great sublease or space comes on the market, you have to be able to get to your prospect and show the space."
Running your own business offers a level of flexibility that isn't available in a national company. In the main room of the herronwilliams office, a baby's playpen sits behind the reception desk. The kitchen is fully stocked. The dress is often casual, as client meetings permit, and a broker has been known to bring a pet to work on occasion.
"We are very flexible," Herron says. "We would rather have someone here working than to have to leave here to get something done."
Herron doesn't regret leaving a national company, but does miss the working relationships she had at NAI/CIP. She says any transition changes the nature of relationships, particularly when you go from being colleagues to being competitors.
"Your natural competitive instinct makes you more guarded with the information that you share," Herron says.
On their own
Entrepreneurial opportunities aren't limited to those in the brokerage arena.
Last year, five principals left Trammell Crow to start The Endeavor Group, a development and acquisition company. Bryce Miller, one of the Endeavor partners, says their reasons were strictly personal.
"In a large, national real estate company, there are so many customers, and that translates into long hours and nights away from home," Miller says. "We wanted something that was more accommodating to our lifestyle."
But Miller says he and his partners haven't been able to achieve their lifestyle goals yet because the excitement and enthusiasm for the work has been so high.
"We are working harder than ever but enjoying it more than we ever enjoyed it," Miller says.
Like Herron, Miller cites customer-focused advantages in a smaller organization, such as concentrating on fewer transactions and spending more day-to-day time with each client.
But as some businesses grow, it becomes more difficult to focus and stay small.
Last year, Ford Alexander left his own one-man shop to work for Colliers Oxford, a full-service real estate firm with international affiliations. After eight years running his own company, Alexander decided he needed the resources of a larger firm to meet the needs of his growing clientele.
"As Austin grew and my business grew, it came to a point where I was just covered up with work, and it affected my ability to service my clients and to continue to grow the business," Alexander says.
"It was either grow my business, hire the people or hook up with the best firm in town and utilize their expertise in running an efficient company. I chose the latter."
The international status of Colliers Oxford allows Alexander to satisfy the needs of clients that are growing globally.
"This way, I have the vehicle to reach out to other brokers around the world to help companies like Vignette, which is one of my clients, to grow from the Far East to Europe to Boston," Alexander says.
Alexander says he thinks opportunities are available in this market for all sizes and types of real estate firms. He offers this advice to those going out on their own:
"Keep it simple, focus on your clients and maintain your service. Don't get too much overhead."
CINDY ROYAL is an Austin-based freelance writer.
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