- change ups
Big Corporations Leaning On Real Estate Specialists
GRAND RAPIDS — Let’s say market changes have outmoded WidgetTech’s Seattle distribution center.
Meanwhile, suppose other trends are forcing the firm to double its manufacturing capacity in the Upper Midwest.
The company can put a corporate staffer on the plane out to the West Coast to unload the one property while assigning a headquarters crew to research whether the right manufacturing expansion site lies in Illinois, Indiana, Iowa or who knows where.
On the other hand, WidgeTech can decide to retain a specialist in the field — an entity that, say, is something like the Corporate Services Department of CB Richard Ellis/Grand Rapids, that is part of a national network.
According to the director of corporate services here, Jeff Cutler, that’s exactly what some major local companies in West Michigan have done.
“We deal with large corporate clients with multi-market real estate concerns,” Cutler told the Business Journal.
“We help them either acquire or dispose of manufacturing facilities, sales offices, distribution facilities, or office buildings all around the country — and even some international sites.”
Cutler illustrated “multi-market” by saying his office represents the real estate interests of firms that might need to sell property in one state while setting up sub-lease arrangements in another and trying to figure out whether to buy an office building in yet another.
He says offices such as his are the fastest-growing segment of CB Richard Ellis nationally.
“They’re the wave of the industry for large corporate clients,” he added.
“Most of corporate clients just aren’t adding expense dollars to their real estate budgets right now.”
Two of the four major clients with whom Cutler’s office has signed national agreements, Cutler said, are Herman Miller and Haworth.
He stressed that his office’s arrangements with the two furniture manufacturers are in areas and matters where the two competitors aren’t competing.
Cutler said his office and Herman Miller recently entered a new 3-year agreement. “We will represent them nationally on their real estate requirements around the country, in both acquisition and disposition assignments.
“They are reorganizing their manufacturing to position themselves for recovery as the furniture industry recovers. That disposition work is taking place in California and West Michigan, and the tenant representation work is taking place all over — from New York, to California, to Florida to Detroit.”
He said the Haworth contract is different.
“They’re doing some portfolio analysis and we’re doing some consulting work for them as they look at their manufacturing operations to make them more efficient in positioning themselves for the recovery.
“We are looking at 12 facilities for them across eight states, analyzing their manufacturing portfolio. So it’s kind of a consulting engagement at first that may evolve into more specific assignments.”
The Lansing native says the work entails a lot of research while spending lots of e-mail time connected to other Ellis offices in those very states and cities.
“We have direct market data in those areas, along with evaluation services and, obviously, marketing services if they are acquiring space or disposing of space.
“I’m often asked if I get out and travel,” Cutler said. “And the answer is, ‘Very little.’
“I typically use the technology available within our service platform with the individual CB offices.”
He explained that what he calls the CB “platform” is a national network of CB Richard Ellis offices that already possess most or all of the information he needs to serve his own department’s West Michigan clients.
“The advantage to the client when they have multi-market real estate requirements,” he said, “ is that instead of engaging individual real estate brokers or company in each individual market and literally having to handle 12 or 14 calls or questions from these brokers, all of that is funneled through a single point of contact, which is our group.
“And then we simply make one call or have one meeting with the corporate client to address all the issues around the country. Then we feed that back out to the network.
“It makes it much, much more efficient internally for the corporate client.
“They don’t have to bother with educating each broker on: ‘Here’s our internal process for approval — and here’s our internal standard lease or buy-sell agreement …’.”
While Cutler and his staff — Matt Steigenga, Julia Lighthiser and Eric Rosekrans — use e-mail, fax and phone to conduct much of their work, he said in real estate there’s no getting away from the paper chase.
“We’ve got a lot of files to maintain,” he chuckled. “Despite all the technology, it’s quite paper-intensive.”
Among the files, he said, are recent cases involving Chapter 11 disposal of 74 retail outlets for Quality Stores, and many surplus facilities from Dow Agrosciences’ acquisition of Cargil’s North American Seed Operations.