Scribcor will begin working on the state's leasing need immediately, according to the Texas Building and Procurement Commission, which awarded the contract. At the same time, the company will develop a "comprehensive strategic plan" concerning the state's space needs.

The commission chose Scribcor Texas over some of the biggest names and biggest companies in commercial real estate. Others that responded to the state's request for proposal included CB Richard Ellis Inc., Cushman & Wakefield Inc., Grubb & Ellis Co., Henry S. Miller Commercial Inc., Jones Lang LaSalle Inc., NAI, PM Realty Group LP, the Staubach Co., Julien J. Studley Inc., Trammell Crow Co., United System Integrators Corp. and WorkPlaceUSA.

Previously, the leasing of commercial space has been handled by individual agencies or the Texas Building and Procurement Commission, which was known as the General Services Commission before a name change in 2001.

The goal of outsourcing the leasing duties is to save money for the state. "Savings generated in this area are important to the effort of the state agencies in meeting the demand for increased services with dwindling resources," said Henry Molina, the commission's spokesman. State agencies have been directed to cut their budgets for the upcoming two-year budget cycle during which the state faces a $9.9 billion shortfall.

Texas pays about $10 million a month to lease space around the state. Scribcor's compensation will come from commissions received from the state when space is leased, Molina says. The commission is not to exceed 4%. No commissions will be paid on renewals unless significant savings are realized.

Joe Bob McCartt, president and COO of Scribcor Texas, tells GlobeSt.com that he hopes to save the state about 15% of its current leasing costs. He estimates that Scribcor will gross between $1.7 million to $1.9 million in the contract's first year.

McCartt, a 30-year veteran of commercial real estate in Texas, says brokers found the state's previous leasing process so hard to work with that many would decline to get involved. One broker, McCartt says, told him that he added $4 per sf to the rent before even talking to the state.

The legislature made changes that allow negotiation between the state's broker and the building owner. McCartt says he brought the idea of outsourcing to the General Services Commission before the process was changed.

Scribcor Texas is putting together a network of local brokers in each of the more than 300 towns and cities where the state leases space. "We're a little bit better than halfway through it," McCartt says. Now that the contract has been signed, he'll work to fill out the network. "It's only through local brokers and local brokers' knowledge of the market" that the best deals can be found, he says. "A lot of deals don't have signs in front of the buildings."

McCartt says Scribcor Texas is affiliated with Chicago-based Scribcor Leasing Services. McCartt owns half the company and Scribcor, the other half. His partner is Gilbert Fell, a Scribcor executive.

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