CRE firms branch out to capture new markets

As commercial real estate professionals struggle to cope with the current market, several local companies are re-adjusting and tacking on new or expanded services.

In the last three months, several local brokerage houses – both big and small – as well as developers have launched new services or campaigns to try to nab more market share.

For example, Fort WorthÂ’s Innovative Developers Inc. launched a new marketing campaign touting its consulting services, which includes everything from strategic and financial planning to asset and construction management and leasing services –  all services the company has provided in informal and formal capacities, but is now rolling into a new marketing effort.

“For a lot of people, the perception of IDI is one of a niche developer and Glen  [Hahn, president] has worked hard to build something bigger than that Â… this is a rebranding, us trying to put a different stamp on our services,” said Mark Presswood, vice president of real estate at IDI.

David Schnitzer, vice president of The Weitzman Group and board member at the North Texas Chapter of CCIM, said the timing for companies seeking to expand services, rebrand or change marketing strategies couldnÂ’t be better.

“We are definitely seeing these companies changing themselves in the market place,” Schnitzer said. “We’re seeing companies reposition themselves or creating specialty divisions or teams in order to focus specifically on areas of the marketplace. Many major brokerage houses are focusing on distressed properties from either the management aspect or the purchasing aspect.”

And who could blame them? A recent report compiled by real estate research firm Real Capital Analytics showed about $10 billion of commercial property worldwide has been foreclosed upon or transferred back to lenders and $72 billion is in trouble. But U.S. commercial mortgages coming due in 2009 could amount to about $170 billion, Real Capital Analytics reported.

North Texas companies big and small have announced expanded services to tap into the commercial real estate distressed property sector, including big names like Trademark Property Co., The Weitzman Group and NAI Huff Partners as well as mid-sized companies such as ArlingtonÂ’s SCM Real Estate Services.

Schnitzer said the companies were able to roll out new products while the market was at its peak, but there was little need for new services and “this market just didn’t have these toxic assets we’re seeing now.”

Perhaps the most aggressive focus on North Texas distressed properties (as well as nationwide properties through its network of 325 offices) is NAI Huff Partners’ launch of its Commercial Property PowerSale, which is a partnership between NAI Global and Florida-based Higgenbotham Auctioneers. The idea is to offer distressed commercial properties throughout the nation to the highest bidder via online auctions held monthly beginning with May and running “until the market tells us otherwise and we run out of properties,” Bud Smith, president of NAI Huff told the Business Press in a previous article about the program.

Trademark Property, developers of Fort WorthÂ’s Alliance Town Center and the on-hold WestBend project, launched its Trademark Property Services division to “help investors and lenders and maximize the value of their retail and mixed-use assets,” according to its company description. Trademark Property Services, which began in April, offers property and portfolio ownersÂ’ advice, strategic plans and other integrated services in four areas: asset strategy, feasibility and research, asset management, leasing and merchandising, development and construction. 

The Weitzman Group/Cencor Realty Services also jumped on the distressed asset band wagon with its April launch of its Cencor Solutions division, a new brokerage and management service offered to owners of challenged Texas retail properties. The service also will acquire various assets from lender and investor portfolios including bank REO portfolios.

SCM took a different approach with its new lender services initiative, which provides assistance to lenders in evaluating and recommending strategies to deal with real estate watch list assets, boasting help with nearly every facet of a distressed property – “from changing the locks on the property to a current valuation,” according to the company’s new marketing materials.

Schnitzer said the new product line starts are typical in a down market – and something that will become more and more common as the real estate market recovers.

“Brokerage fees are down, and there’s still overhead to pay for, so companies are expanding services,” Schnitzer said. “If they haven’t offered a service before, they’re offering it now.”

As for the future of such services, Schnitzer said if the companyÂ’s new divisions prove to be a successful service, they may be permanently added.

“If they get some good traction on it then it may be something they continue with once the market comes back. Or maybe not. For now, everyone’s just trying to deal with overhead,” he said.