Forum 100 - NAI Global Ranks #2 in Brokerage
Author: Shirley Blanchard
In the Forum's FORUM 100 - NAI Global Ranked #2 in Brokerage
- #1 - CB Richard Ellis
- #2 - NAI Global
- #3 - Cushman * Wakefield
- #4 - Grubb & Ellis
- #5 - Colliers International
Jeffrey Finn, President and CEO
2006 Gross Revenues: $0,750 billion
2007 Projected Revenues: $0,800 billion
Number of Transactions in 2006: 41,000
2006 Transaction Value: $42 billion
Number of Offices: 375
Number of Employees: 8,000
Started by General Finn in the late 1970s under the New America Network banner, NAI today is a collection of independently owned commercial real estate brokerage firms with offices in 55 countries worldwide. The Princeton, NJ-based organisation manages over 250 million sf of commercial space and provides a range of brokerage, advisory and property services. In 2005, NAI added capital markets and global advisory solutions to its service offerings. It recently launched a new venture to provide retailers and shopping center developers such as site selection, acquisition and disposition representation, valuation and project management. The company was one of the first to jump on the technology bandwagon with the creation of RealTrac, a web-based transaction management program. Office and industrial deals dominate NAI’s business, making up 30% and 31% of its activities, respectively. Retail deals account for another 20%.
The industry’s leading companies in the brokerage, ownership, finance and development arenas
It has been a roller coaster of a year commercial real estate.
The beginning of 2007 had the makings of a blockbuster, starting with the closing of the $38.3-billion purchase by the Blackstone Group of Equity Office Properties Trust. The flow of mega deals continued through spring with a partnership between Tishman Speyer and Lehman Brothers buying apartment REIT Archstone-Smith for $22.2billion.
But as the temperatures heated up in the summer months, the market started to cool down. The days of cheap financing ended as the fallout from the subprime residential mortgage crisis carried over into the commercial area. Lenders began pulling back on deals perceived to be risky and brought underwriting standards more in line with their comfort zones. The resulting credit crunch triggered widening spreads and rising interest rates. In the CMBS market, new loan organisations dropped and it became difficult for pool sponsors to sell the bonds at a profit. REIT stocks also took a bit of a tumble as investors backed away from anything associated with real estate.
Sales also decreased. According to Real Capital Analytics, the number of investment deals dropped by 25% in September and the data provider expects to see a similar decline in October activity once results are posted. ‘properties fell out of contact in September than were put under contact. No new privatizations and few large deals have been announced since mid-August. However, deals are still happening and momentum is slowly returning as investors adjust to the new pricing regime,’ RCA noted.
The credit crunch has many in the industry taking a bearish view of the market for the next 12 months. However, despite this seemingly uncertain environment, a recent report by Prudential Real Estate Investors points out that real estate fundamentals are relatively healthy, nothing that additions to new supply are under control, mortgage delinquency rates remain near historic lows and both debt and equity capital are still available. Prudential analysis predict that industry should weather the turmoil in the credit market fairly well, the CMBS and CDO sectors will come back and liquidity will return.
Today, the US commercial real estate market is worth approximately $5 trillion, according to Real Estate Roundtable. It comprises roughly four billion sf of office space; 13 billion sf of industrial property; almost six billion sf of retail footage; 33 million sf of rental apartments; and 4.4 million hotel rooms. The industry generates nearly one-third, or $2.9 trillion, of the US GDP and creates jobs for more than nine million Americans, relates the Roundtable.
And like any other major industry, commercial real estate has seen its share of ups and downs. Those companies that moved with the times, that found as many opportunities in the down cycles as in the upturns, will continue to not only survive but to grow.
For the first time, REAL ESTATE FORUM has ranked the industry’s top 100 companies in the brokerage, finance, development and ownership arenas. The rankings were determined based on statistical information provided by the individual firms. We looked at four general categories-number of offices, number of employees, last year’s revenues and projected revenues for 2007-plus two that were calculated to determine each company’s overall score.
Since we can’t measure a brokerage firm against developer or an owner to a lender, we did an apples-to apples comparison and kept the categories separate. For each industry sector, we are spotlighting 25 firms and of those, we have profiled the top companies. (Fore expanded coverage of the firms and the entire roster of nominees, please visit www.reforum.com/forum100) and as the numbers bear out, these companies truly are leaders in their respective industry segments.