The move is part of a strategic growth plan for Grubb & Ellis as they are working to expand their presence around the country in the midst of the downturned market.
“Grubb & Ellis is committed to continually evolving to best meet our clients’ needs. In this instance, we are expanding our service coverage throughout all of Southeast Arizona with the opening of a full service office in Tucson and staffing it with some of the market’s most talented professionals,” said Jack Van Berkel, Executive Vice President and Chief Operating Officer of Grubb & Ellis Company.
 The faces of Grubb & Ellis: from left, Howard Kong, Bill DiVito, Scott Soelter, Bob Davis and Michael Townsdin.Joe Pangburn photo |
“They’re in a pretty aggressive growth mode right now,” said Kong of the company. “They brought in 25 senior brokers nationwide, our group being one of them.”
The growth has created a buzz in the industry according to Davis. He said they saw some opportunities with Grubb & Ellis that could help give them an advantage and they went for it.
Grubb & Ellis had a presence in Tucson before as an affiliate office but closed.
“It’s really a new company,” said Davis. “They had a big merger with Triple Net Properties, a commercial real estate investment trust. So now the company has no debt. Which is extraordinary compared to other international commercial real estate brokerage firms. We are a national company that has a national platform but our office has a boutique flavor.”
The merger has also given Grubb & Ellis new services to offer its clients giving a unique place in the industry.
“We can handle your real estate, but if you’re also looking at getting into public non-traded real estate investment trusts or TIC programs we can provide that for you too,” Kong said. “You can be a hands-on manager or more of a passive investor. It is exciting to be able to offer that.”
Soelter came to Grubb & Ellis from Bourn Partners LLC, a local brokerage. He said Tucson has many great local and independent commercial companies, but he finds interest in the national platform.
“The local companies have been here a long time and they have the same local knowledge of the market because they’re in it every day too,” he said. “But when you start having these national and international connections it really becomes a conduit that goes both ways. Grubb & Ellis adds another pipeline here, and who knows somewhere in our network another person’s client decides they need to expand or they need a presence in Tucson. They can contact us for the local expertise for their client. That’s just one more way of getting it here. And that’s the goal is to get companies here.”
The focus on getting companies here has to start with where we are now.
The group believes we are still in a correctional period as market elements, transaction volume and values are all down.
“The capital market collapse had an impact,” Soelter said. “I think we were still heading this direction before the capital markets collapsed but they helped us get there quicker.”
Soelter believes we’re closer to the bottom and things will start to tick upward in the first part to mid next year.
Through it all, they see Tucson as a much safer place for people to invest than other markets.
“We haven’t got the velocity in these markets that end up with these huge hills and valleys quickly,” Davis said. “We pretty much hover around equilibrium with smaller spikes.”
Soelter agreed that Tucson’s market is relatively good.
“Tucson has been riding a 15-year wave of great population growth, increased jobs, and development, Soelter said. “Today we are disappointed based on the recent past, but, yes, this is a correction period but it is not as bad as it could be and it is definitely not as bad as it is in other markets.”
“The real fear right now is to stabilize the properties that already lost some tenants,” said DiVito. “If they aren’t stabilized, they could become non-performing assets. Depending on how long the cycle lasts, we could see a whole new wave of vacancies. Thankfully we aren’t overbuilt.”
On the other side of the coin there are some great deals out there right now, according to Soelter.
“There are two sides of this,” Soelter said. “There is a bad or sad story on one side, but a tremendous opportunity for someone else. There’s a lot of money sitting on the sidelines waiting to come out. And it is not going to come out until they think the water is ready. Then the recovery could happen really quick. We’ve never had this much capital sitting on the sideline. It’s really fascinating, because it could be a tremendously quick shift when it turns.”
For the moment, Soelter calls the market situation now the rodeo period.
“If you can hold on for eight months you get a buckle.”
The group looks to grow and expand the office, but not at the expense of the quality of its professionals.
“The focus is going to be very selective with the people we bring on,” Kong said. “We’re not trying to be everything to everyone, we’re not trying to be the biggest company in town, we want to be the best servants of our clients.”
Contact Joe Pangburn at jpangburn@azbiz.com or at (520) 295-4259.
Grubb & Ellis
3333 E. Speedway
(520) 321-3330
www.grubb-ellis.com
The third international commercial real estate brokerage firm to enter the market. Grubb & Ellis also offers real estate investment opportunities to clients including tax-deferred 1031 tenant-in-common exchanges; public non-traded real estate investment trusts and real estate investment funds.
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