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Thursday, Mar 28, 2024

Upstart Brokerage Pins Its Future on Thinking Small

Upstart Brokerage Pins Its Future on Thinking Small Real Estate by Shelly Garcia A few years ago, much of the real estate industry began embracing the bigger-is-better theory of management, and the urge to merge saw local real estate brokerages gobbled up by regional ones and regional firms absorbed into national companies. There’s a lot to be said for national clout, but now one company is hoping it can find opportunity in what those coast-to-coast behemoths have left behind. Tom McAndrews, founder and president of Tiarna Real Estate Services, figures that what the nationals can’t do is provide services exclusively for one side of the real estate transaction, and he set up the company with the express purpose of serving the needs of landlords and property managers. Two-year-old Tiarna launched with four locations Newport Beach, Scottsdale, Ariz., Oakland and Encino but, except for Newport Beach, the offices were engaged only in property management. That changed several weeks ago. McAndrews recruited two Daum Real Estate Services brokers to the company’s San Fernando Valley office and, with the addition, the unit has expanded into leasing services as well. Paulette Toumazos and Angie Weber have joined Tiarna as vice presidents in the Encino office, which now manages about 350,000 square feet of space throughout the San Fernando Valley. The partners, who also represented landlords at Daum, brought with them listing contracts for about half that space. Tiarna manages a combined total of 3.4 million square feet of mostly office and industrial space throughout its branches. That is small by most standards, and small real estate companies have not enjoyed a great deal of success recently competing in an arena filled with national players. But McAndrews believes that specializing on the landlord side will help the company go up against those larger firms. “A company that does both (landlord and tenant representation) still has a potential conflict,” he said. “Our business somewhat eliminates that conflict.” When a brokerage represents tenants and landlords, brokers will show a client many space options, often including among them space owned by a company that is also a client. It is not uncommon for the same brokerage to represent tenants and landlords in lease negotiations either. Some owners shrug off the conflict, noting that it is the nature of the real estate industry. But McAndrews says that in conversations with institutional owners pension funds, banks, etc. those investors indicated they would prefer to work with an agency that represented landlords exclusively. “There was a big consolidation in the mid- to late ’90s, and it took out many of the good regional competitors,” McAndrews said. “So listening to clients saying we’d like a management brokerage team to work together with us, as well as the elimination of competition, created a void or a niche that I think we can fill.” McAndrews, who spent about 18 years with Charles Dunn Real Estate Services, eventually as head of the company in Los Angeles, said that, unlike national tenants who often prefer to work with one brokerage company with offices in multiple locations, institutional landlords prefer to have different representatives in each region in which they operate. “Most institutional landlords aren’t willing to put all their eggs in one basket,” said McAndrews. “It’s too risky. If the company makes a mistake on a portfolio or raises its prices, the landlords have no one to fall back on that is familiar with their requirements.” While these types of owners won’t work with a company that has a single location, they are willing to contract with a firm with multiple locations in a region. That thinking led McAndrews to set up four locations for the firm, he said. So far, only about 10 percent of Tiarna’s revenues come from leasing, but McAndrews hopes to raise that ratio to about 50 percent as the offices grow. Kearny Steps into Warner Center Deal Kearny Real Estate Co., a Los Angeles-based division of Morgan Stanley Real Estate Funds, has reportedly jumped into the void left by the withdrawal of The Voit Cos. to become the second bidder for Warner Center Properties. Kearny is going after the low-rise segment of the portfolio, which includes 15 properties. The purchase price is believed to be about $63 million. The second bidder, Douglas, Emmett & Co., is negotiating for the high-rise portion of the 2.3-million-square-foot property, owned under a joint venture by Alaska Permanent Fund Corp. and Harvard University’s endowment fund. Voit officials said they were forced to lower their bid after new information about additional costs came to light. That sent the owners back to the drawing board to select another bidder for the property. Bertelsmann Expands Sares-Regis Group has leased a newly constructed Valencia building to Bertelsmann Services Inc. The 142,141-square-foot industrial facility, at 29011 Commerce Center Drive in the Valencia Commerce Center, is the company’s fifth facility in the Valencia area. Bertelsmann Services, a unit of German conglomerate Bertelsmann AG, handles customer relations management, commercial printing and other services in the Valencia area. Terms of the lease were not disclosed. Developer Sares-Regis completed construction of the building last year. Doug Sonderegger and Craig Peters, brokers with CB Richard Ellis, represented Sares-Regis. Bruce Powell and Tim Crissman, of Crissman Commercial Services, represented the tenant. Coldwell Banker Goes West Coldwell Banker Residential Brokerage, Greater Los Angeles Co. acquired Coldwell Banker Town & Country, a Ventura County brokerage with offices in Camarillo, Mission Oaks, Oxnard, Thousand Oaks, Ventura and Ventura Beach. The Town & Country unit employs about 140 sales associates. Senior reporter Shelly Garcia can be reached at 818 676-1750, ext. 14 or by e-mail at [email protected].

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