CRE Firms Merge to Compete with Global Players

HOUSTON—The recent merger between Madison Marquette and PMRG joined two privately held companies. The former, a commercial real estate investment and operating company, and the latter, a commercial real estate firm specializing in project leasing, property management, investment management and development services. In this exclusive, Rick Kirk, chairman and CEO of PMRG, shared some insights into the merger.

GlobeSt.com: What makes the climate ripe for mergers these days?

Kirk: A growing percentage of the commercial real estate market is controlled by institutional owners who demand single-source providers. Regional firms struggling to provide the resources required to meet the expectations of these sophisticated investors are seeking ways to compete with the global players. In our case, the merger with Madison Marquette immediately doubles our size and expands our asset focus beyond office, medical office, industrial and multifamily to include retail and mixed-use expertise, as well as capabilities in all primary gateway markets.

GlobeSt.com: What approach did you take to choose the right partner for a merger?

Kirk: Obviously economics are important, but in our case, the culture of our partner was critical, as were their long-term strategic goals. Most of the potential suitors with which we discussed some form of combination were interested in one phase of our organization but not another. We felt that the synergies between the property service, development and investment businesses provide greater value than the sum of their parts might indicate, thus we were looking for someone with a similar perspective.

GlobeSt.com: Were there overlap markets and are those offices being merged?

Kirk: Madison Marquette was so attractive because of the way we each complemented the other in terms of geographic presence and expertise in various product lines. Given very little overlap in the markets in which we operate, the merger produces very little duplication of services, staffing and locations.

GlobeSt.com: What will the presence in Houston look like?

Kirk: Our presence in Houston will look very much the same as it does today. Virtually all of PMRG’s team have been retained in their current roles. In fact, we are picking up quite a few additional people as some of the corporate support groups will be relocated to Houston. We just started construction on 3300 Main, our latest multifamily development and have several other projects in the pipeline. We hope to take advantage of Madison Marquette’s expertise and vast experience in retail and mixed-use development as we continue to evolve. Naturally, we will maintain our focus on our historical roots, providing real estate services to our institutional clients and private investors.