As an SSP member company, Kidder Mathews' three divisions will adopt Insignia/ESG's marketing policies and procedures, operating platform and corporate governance protocols. How much Insignia paid to sign the 175-person brokerage, property management and appraisal operation is not being released, but Kidder Mathews President Jeff Lyon tells GlobeSt.com that his company will be paying Insignia an annual operating fee and engaging in the traditional fee-sharing.
In a separate agreement, Insignia/ESG will combine its existing regional property management portfolio, totalling approximately 3 million sf, with Kidder Mathews' 5.5 million sf. portfolio. The deal will make Insignia Kidder Mathews' property services division the second-largest property management company in the Seattle market, with a 54-person professional staff and more than 8.5 million sq. ft. of property under management.
Founded in 1969, Kidder Mathews is the largest commercial real estate firm in the Seattle region, with 174 professionals and staff members in five offices in Western Washington. In 2001, Kidder Mathews' 85-person brokerage division completed more than 720 transactions valued at $792 million. In preparation for the re-affiliation, Kidder Mathews recently bought out Quadrant Corp.'s 25% interest in its property management division.
Insignia/ESG is one of the largest commercial real estate services providers in the United States, with comprehensive brokerage, consulting, property management, fee development, investment sales and debt placement operations. Insignia's Western Region Director Robert Shibuya tells GlobeSt.com that it took a year or so to understand the opportunities in the market and come up with a strategic plan. "We ultimately realized we needed to have a strategic relationship with Kidder Mathews," says Shibuya. "They have a dominant presence in the market," says Shibuya. "It would be hard for us to achieve that quickly on our own."
The affiliation ends a month of activity for Insignia on the West Coast. Last month, GlobeSt.com broke news that Insignia had started an investment brokerage division in San Francisco by luring Bob Gilley away from Cushman & Wakefield, where in 2000 he and then-partner Jeff Congdon sold nearly $1 billion of institutional quality real estate.
Also in January, Insignia ended a long search for someone to lead its Portland, Ore., operation by luring Steven Klein away from Trammell Crow, where he was an executive vice president and principal in charge of industrial and brokerage operations and responsible for developing numerous projects while also building the company's brokerage services department.
Kidder Mathews is the fourth independent commercial real estate firm to join Insignia's SSP program. Two of the other three -- in Richmond, Va., and Pittsburgh, Penn. -- also were previously affiliated with Oncor International, a network organization of privately-held commercial real estate firms that is based in Washington, D.C.
"Oncor is a network of very strong independent companies, but when day is done Insignia adds some things Oncor did not offer," says Lyon. "For one, Insignia is a real estate operating company with a dominate real estate position worldwide … (which) gives us an opportunity to compete for business on both an institutional and broader scale."
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