Two years later, Sperry Van Ness still growing

Despite facing what is arguably the worst commercial real estate market in memory, the local Sperry Van Ness office increased its activity and took over as the largest commercial real estate brokerage in Northern Colorado.

The SVN office in Northern Colorado had its roots in the commercial division of The Group Inc. Real Estate. Starting in 2006, Group Commercial Manager Steve Kawulok started to explore options to spin the division out.

“We saw that our clients were demanding a higher level of services,” he said.

The Group had a solid local network; however, with more money coming into the region from across the country, Kawulok felt the commercial brokers needed to affiliate with a national firm. After investigating a number of firms, Kawulok settled on SVN. He cited the company’s national network of investors, marketing platform, in-depth analytics and ongoing educational resources as differentiating factors.

“We felt the Sperry Van Ness model was the best fit,” he said. “It closely modeled what we had built at The Group.”

In late 2007, 10 brokers split from The Group to form the Northern Colorado SVN office. Already the cracks in the industry were showing, but Kawulok said the team didn’t second-guess its decision to bring a new name into the region’s real estate mix. Instead, the decline reinforced their decision to seek out a larger network.

“We really felt fortunate (to align with SVN) at a time when people who need to get deals done are requiring a higher level of services,” he said. “They need top-level advice now more than ever before.”

In-depth data

At a time when there are six sellers for every buyer and many properties are mourning anniversaries on the market, Kawulok said clients on both sides require more in-depth analytic data. Additionally, national investors are focusing more attention in the state and the region, making a wider referral network that much more important. SVN recently hosted a California-based private equity group touring the market. Kawulok said they seemed impressed with Northern Colorado, especially since California isn’t an attractive investment anymore.

The in-depth advisor strategy appears to be working for the firm. According to Business Report research, Sperry Van Ness became the largest commercial real estate brokerage in 2009, based on total volume brokered. The firm’s 15 brokers closed deals worth $62.47 million in 2009, up from $51.9 million in 2008. By comparison, Realtec Commercial Real Estate Services Inc., the longtime top brokerage, saw its brokered volume decline from $82.19 million in 2008 to $44.27 million in 2009.

Some of that volume has come from institutions. The SVN team has carved out a niche in Colorado representing banks and banking regulators in real estate deals. The firm landed the listing for the Federal Deposit Insurance Corp. properties following the 2009 closure of New Frontier Bank. It is also now listing the Champion Chevrolet facility at the former Iron Mountain Autoplex for BBVA/Compass Bank. Kawulok said they landed that listing by focusing on the highest and best use for the property, rather than continuing to brand it as a car dealership. The listing instead suggests a manufacturing/employment use and has already had a few nibbles.

Industry culling, SVN growing

Kawulok recently wrapped up a stint as president of the Northern Colorado Commercial Association of Realtors. During the past few years, the organization saw membership drop from 200 to 125.

“The industry is culling itself out,” he said.

At the same time, SVN has been slowly adding to its ranks, with 14 brokers now in its Northern Colorado office. Several of the additions are new to commercial real estate. The company picked up broker Travis Ackerman when he graduated from Colorado State University in May 2007. Within three months of the SVN office officially opening, he closed a $1 million shopping center deal.

Ackerman, who served as president of the CSU Real Estate Club, got to take the brokerage for a spin in an internship role before graduating. He ultimately decided to join the firm for many of the same reasons that The Group brokers chose it for their spinoff – automated back office systems and the focus on the client relationship. Additionally, he feels the company is well known for being at the leading edge of technology adoption in the industry.

Kawulok also pointed to the technology platform as a major competitive advantage. Listings are up and active the day the contract is signed and easily accessible by brokers and investors throughout the nation. With the economy still floundering and many sellers increasingly anxious to off-load property, that quick turnaround could be the difference. Since spinning off from The Group, the SVN brokers have seen total listings double.

“Doors that hadn’t opened before are starting to open now,” Kawulok said. “Year one was an introduction to the marketplace, and in the second year, it really started to pay off.”

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