CHICAGO—The recession may be behind us, but many in the commercial real estate industry learned a few lessons during that troubled time that still apply in today's business climate. The 20-member Epic Realty Partners in suburban Rosemont, for example, had a thriving industrial practice when the bottom fell out of the market, and decided it was time to partner with a national platform.
“When you're a local independent firm, you're prevented from executing some business with large, national owners,” says John Coleman, the executive managing principal. And since the economic collapse set back the plans of its smaller, local clients, Epic needed access to those Fortune 500 companies that still had the wherewithal to cut deals.
Yesterday, GlobeSt.com reported that Epic was just acquired by the Houston-based Transwestern. But until late last year, Epic had allied itself to Newmark Grubb Knight Frank, another national firm. “They understood the value of collaborating with people in other markets,” he says, and like Transwestern, wanted to gain a foothold in the Chicago industrial market.
The Epic brokers found that having access to the resources, cachet and deal stream of a national firm was quite beneficial, and even after the metropolitan industrial market began recovering they wanted to continue the strategy. However, “we made the decision that we didn't want to partner with NGKF any longer,” Coleman says. The difficulty was that NGKF was too heavily involved on the occupier side of the business.
“That's a wonderful side of the business, and we're in it as well,” but Epic works more often with landlords and buyers, and Coleman and others at the company felt they needed a like-minded national partner. After looking around a bit during the past year, “it became clear to us from a business perspective that Transwestern was constructed the way we were,” and “just as committed to the Midwest as the coasts.”
Although the local Transwestern office already provided a full-range of real estate services in many sectors, the key role played by the Chicago industrial market in the US, especially in the field of logistics and distribution, made establishing a presence in that sector imperative, says Mike Watts, Transwestern's Midwest president. “You want to be able to service clients at a high level of consistency across regional boundaries.”
“But we wanted to be careful how we did it and who we did it with,” he adds. Transwestern had several options. “You can grow it organically, hiring one broker at a time,” but since Epic was already “a self-sufficient entity” looking for a new partner, “it seemed like a perfect fit from a timing standpoint.”
Transwestern will now have about 75 brokers in the area, up from 55, and get a new suburban office to match their existing one in the city. And Epic will also fulfill its desire to merge with a privately-held firm. “They had exactly what we wanted and we had exactly what they wanted,” says Coleman.
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
