HOUSTON-Doug Knaus, one of the founding partner of Means Knaus Partners, says the very recent acquisition of MKP by Jones Lang LaSalle started, in earnest, about five months ago. "We had some of the first conversations with JLL about a year or so ago," he adds. "In the past five months, it became more apparent that the decision was the right course for our company, at this point in the structure."
Though the JLL-MKP acquisition was months in the making, Knaus tells GlobeSt.com that, in actually, the conversation started close to 30 years ago. "These were relationships with people who worked at some of JLL's predecessor companies," he observes, pointing out that, for example, during the early 1980s, he worked with Dan Bellow, who is now president of JLL-Houston in the early 1980s. "I go across the system with a lot of people," Knaus says. "I've had a lot of good, strong relationships for 25 to 30 years."
It's those relationships that provided Knaus with an idea of JLL's corporate culture when it came time to determine whether Means Knaus should join up or remain an independent. "It was a matter of understanding how the very most senior people think in JLL, and understanding their legacy of performance," Knaus remarks. "Their commitment to client services, in addition to providing us with more capabilities, was a positive thing for me in making this decision and becoming part of JLL."
He's correct about "becoming part of JLL" – once the smoke settles from the acquisition, the MKP brand will go away and the teams integrated. The MKP team (all of it; no one is being laid off) will continue operating out of its current office at 2000 W. Loop South, though some of the executives will move to JLL's location at 1400 Post Oak Blvd. JLL's Bellow tells GlobeSt.com that his company is working to get the integration completed as quickly as possible.
Though relationships formed the basis of the deal, sheer practicality drove it. For JLL, which is attempting to ramp up its property management services, the acquisition adds approximately 16 million more square feet to its portfolio. Meanwhile, for Knaus, the acquisition offers the opportunity to provide services other than strict property management. One example he uses is the April 2013 sale of the 466,000-square-foot One Westchase Center at 10777 Westheimer to Investcorp.
"We'd been managing it, and JLL actually sold it and financed it," Knaus says. "We were fortunate enough to remain involved with the new owner, but there were clearly parts and pieces we didn't have." Given today's market and client demands, he continues, owners and investors prefer not to have to hire five or six different firms to achieve their commercial real estate investment goals.
Bellow agrees, adding that institutional owners, more and more, are requiring different service capabilities from commercial real estate firms. "They're not just looking for a property management here, ownership there, and brokerage somewhere else," he says.
The acquisition means that Knaus and his team can bring more services to clients, while JLL bulks up its property management portfolio. But Bellow is emphatic that any kind of merger or acquisition be about more than dollars and cents.
"You don't buy companies just for the revenue, but because of the quality of the relationships, the people and the culture," he says. "When you find that match, it seems as though the acquisitions make sense."
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