By JENNIFER NETHERBY Staff Reporter For property management firms, 1998 was the year of the merger, with four of the top 15 firms on the Business Journal list either merging or buying other firms and boosting their Valley holdings overall. “The real estate service business is very fragmented across the country and the trend is toward consolidation,” said Dorcey Abshier, managing director of Trammell Crow Co., which bought L.A.-based Tooley & Co. in March. The acquisition pushed Trammell Crow into the No. 3 spot on the list. Trammell Crow’s biggest Valley property is Harmon International Business Campus in Northridge at 830,000 square feet. Joy DeBacker, vice president and regional manager for La Salle Partners, said mergers are becoming necessary because many clients are expanding globally and are looking for companies that can serve them worldwide. La Salle merged with Compass Management and Leasing in October. “The world became a lot smaller,” she said. “Our client base tends to be not just here in the United States, but internationally. You can’t be limited geographically.” Jason Fine, director of portfolio services for Seeley-Ewing Partners, said despite his company’s acquisition of parts of Newport Beach company Koll Real Estate, his firm will continue to focus on smaller properties in Southern California. “We’re just trying to focus on our back door,” Fine said. “For us, (consolidation) just narrows the competition.” CB Richard Ellis merged last year with REI Ltd. of London and Hillier, Parker, May & Rowden. Overall, property managers saw steady growth in 1998. The top two firms held their places on the list for a second year. Woodland Hills-based Voit Management Cos., the only top firm with headquarters in the Valley, held on to the No. 1 spot, managing 3.7 million square feet of Valley office and retail space and 156,000 square feet of industrial space. The company continued steady growth as it added 400,000 square feet to its portfolio in 1998. Voit’s most lucrative property is Warner Center in Woodland Hills, where tenants include Health Net, SunAmerica Inc. and the California Endowment. “In terms of sale prices, there’s a feverish pitch continuing for good property,” said Jeff Lapin, Voit vice president and regional manager. “At Warner Center, we’re at 90-plus percent occupancy and rents in excess of $2 (per month per square foot).” Charles Dunn Real Estate Services Inc. was second on the list with 2.6 million square feet of office and retail space in the Valley and 605,000 square feet of industrial space. The list changed little over last year, with TrizecHahn Office Properties Inc. being the only new entrant. The other big shift in the property management industry last year was the slowdown of competition from real estate investment trusts. Over the past few years, REITs had been buying up properties, taking over more control of tenant management and pushing property management firms out of the market. “The REITs have pulled back a bit,” Lapin said. “The REITs have not had access to capital as they did last year. They’re not as strongly competing for property.” Mark Leonard, Trammell Crow’s principle senior vice president, said in 1999, the industry will probably see more consolidation and growth in the Valley market. Lapin agreed that the property management business will continue to grow in the next year, but said he doesn’t expect it to match that of 1998. “1998 was an incredible year for everyone,” he said. “1999 will be a little slower. There will be sustainable growth in 1999, which I prefer.”