Boutiques Resilient in Face of M&As
By John Salustri | Globe Street
CHICAGO—The spate of multinational service providers gobbling up—or being gobbled up by—other multinational service providers leaves one to wonder what the smaller boutiques, the moms-and-pops of the industry, are thinking. Members of the Independent Brokers Group of the Society of Industrial and Office Realtors aren’t flinching.
Thornburgh: “There will always be a substantial place in the market for the highly skilled boutique and regional firms.” It was an appropriate time to chat with the folks of SIOR (a GlobeSt.com Thought Leader), given that the association’s Fall World Conference is set to kick-off here on October 8. And while the consolidation trend does tip the scales of competition toward the big boys, there’s plenty to be gained from the boutiques.
“The larger firms can control the market, setting rental rates and term structure,” says Jason M. Crimmins, CCIM, SIOR, president of the Short Hills, NJ-based Blau & Berg Co. “But there are corporate users who recognize the value and local expertise that independent firms have to offer. As an independent, we bring not only our local proficiency but every other SIOR independent’s local expertise.”
That’s where the IBG comes in, he says. “The IBG has been crucial in uniting our firms, and helping us display our local market expertise while providing a global network of SIOR professionals.” In essence, he says, the IBG gives otherwise regionally restricted firms an unprecedented national reach.
Robert G. Thornburgh, SIOR, CCIM, CPM, president and CEO of Heger Industrial in Long Beach, CA, is equally philosophical about the rise of the M&A trend—and the strength of the independent broker in the face of that trend. “All businesses, large or small, are continually searching for efficiencies and developing ambitious growth plans,” he observes. “A vibrant company closely examines procedures; systems; and inevitably, its people.” As a result, he adds, there should be no surprise that consolidations are taking place. “It’s a natural part of this process.”
Crimmins: “Relationships can become a factor only when results are provided.” But that activity doesn’t change the role of “the skilled, independent niche operator. Consolidation and recent growth are certainly in part being fueled by larger corporate clients who are opting for the efficiency of a single provider,” says Thornburgh, who is director of SIOR’s Western region. “However, there will always be a substantial place in the market for the highly skilled boutique and regional firms that continually place a premium on relationships and delivering a higher level of service.”
Crimmins notes, however, that smaller firms still have to focus on the basics. “Relationships become a factor only when results are provided,” he says. “All clients ultimately focus on the bottom line. Given the proper platform to distinguish broker from broker, they would ultimately choose performance over relationships.” In the smaller firm he believes, clients are most likely to get both.
It’s the nature of the market that the mega-mergers will continue. It’s the nature of the smaller shops, to simply keep on keepin’ on, to keep their eye on that performance and those relationships. “As an independent boutique company,” says Crimmins, “all we can do is continue to make deals, develop stronger relationships with our clients and continue to get our name out there.”
Click here for link to Globe Street Article