In a series of interviews that shaped up both before and after the news was made public, Mosler sat down with GlobeSt.com to discuss the changes that the Manhattan-based firm, now flirting with $1 billion in annual revenues, has absorbed, as well as a range of other issues.
When asked what specifically--beyond market coverage--the Cushman merger does for C&W, Mosler said it enhances "revenue share across the board. What John [Cushman] brings is access to the corporate boardroom. His Rolodex and track record make him a real rainmaker." Mosler says that Cushman will also be working with him and Arthur Mirante to focus on "recruitment, retention and client development."
In terms of the tightness of the fit between the two firms, the US operations president says there is virtually no redundancy. "Our core strength in Houston is in industrial," he says, "while Cushman has focused on tenant rep and investment sales. In LA, where our core strengths are the same, there is no overlap in our clientele, so on a client-by-client basis, it's additive to our strength."
The other thing the merger does is bring a halt to a short string of alliances that included the recent purchase of the Atlanta-based Apartment Group, which fleshed out C&W's multifamily operations. "We're not acquisitive by nature," he says. "Growth from here on will be done organically."
Growth can be tough in a slowing economy, but Mosler doesn't flinch. "We're clearly in a slowdown," he says, "although it's being felt a little less in the Northeast, given the diversity of the tenant base and the core strength of the financial-services sector to date. While it's too early to say how long we will feel the effects of the slowdown, there is currently a phenomenon going on with businesses managing themselves more quarter-to-quarter than by making long-term plans. When people get more comfortable about where the slowdown will bottom out, you'll see a return to more strategic decision-making."
How will the slowdown impact C&W's $1-billion revenue projections? Mosler isn't backing off of those projections by a penny, noting that the expansions in market breadth were all based on enhancements to already existing core services.
In all of the changes that have taken place in the past few months, he says, "We are building a capability around an area where we have clientele. Take retail. We manage over 250 million sf of office space in the US, and there is retail associated with most of those properties, so we've given ourselves the opportunity to further service our clients in core areas. This was not a great leap of faith."
Building any capability takes consistency, which comes at a premium when brokers jump ship, and C&W in the past few months has been at both the giving and receiving end of this trend. Mosler is nothing if not an unabashed waver of the corporate flag.
"A fact of life in this business," he says, "is that C&W will always gain talent because of the great brand name. Yet, there is a phenomenon going on in the marketplace, where firms are willing to pay tremendous multiples on earnings for people to come over. That has not been our practice. Any people we have attracted have come to this firm for the transaction platform. So, we'll see if that phenomenon sustains itself; I suspect it will not, because the trendsetters here are the public companies, and if they fail to meet their quarterly earnings in this economic period, the phenomenon will reverse itself."
Then what of the bailouts from C&W? A sign of the times, says Mosler. "They find more time on their hands to evaluate. When people move due to economics, they're likely to move again when the contract is up. We won't pay multiples we can't return to the bottom line."
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John Salustri
John Salustri has covered the commercial real estate industry for nearly 25 years. He was the founding editor of GlobeSt.com, and is a four-time recipient of the Excellence in Journalism award from the National Association of Real Estate Editors.
