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Local commercial real estate firms seeking nationwide reach through affiliations

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In what appears to be a trend, three of the largest locally based commercial brokerage firms have recently affiliated with national organizations to broaden their reach.

The three firms are Burnham Real Estate Services, GVA/IPC Commercial and Grubb & Ellis/BRE Commercial.

This week, Burnham Real Estate Services, which has been part of the San Diego scene for more than a century, announced that it has formed a strategic partnership with Apartment Realty Advisors (ARA), a national multifamily-exclusive investment brokerage based in Denver with 11 offices throughout the country, including new offices through existing Burnham locations in San Diego and Las Vegas.

The new partnership is called ARA/Pacific and will deal exclusively in apartment transactions.

Ed Rosen and John Chu, Burnham senior vice presidents and principals, are expanding their role to also become principal partners with ARA/Pacific. Rosen and Chu specialize in multifamily investment sales and rank among Burnham's top producers annually. Stath Karras, Burnham's president and chief executive officer, will be on ARA's national board of directors.

"This partnership with ARA gives us the opportunity to expose Burnham Real Estate clients to investment opportunities throughout the United States, as well as give them access to the best team to dispose of product in markets other than Southern California," said Karras.

ARA expects to represent more than $4 billion in transactions in 2004.

"The ARA expansion and partnership with Burnham Real Estate gives national and regional apartment owners, investors and vendors direct access to decision-makers in major markets throughout the United States -- including a new presence in the Pacific Southwest," said Jeff Hawks, ARA principal, in a prepared statement.

ARA/Pacific's platform gives sellers of multifamily properties real-time access to a DataLink database of national and international buyers.

When asked if this new affiliation poses any threat to the local office of Marcus & Millichap, which competes head to head with Burnham, Kent Williams, who manages Marcus & Millichap's regional office here, didn't seem too worried.

"ARA is a very good firm, but we are a $10 billion annual transaction firm. I think most people would perceive us the leader in this industry," Williams said.

While Williams does believe Burnham will benefit, he believes ARA will benefit more because it will now have a foothold in San Diego. Williams said Burnham, which has long had a multifamily division, has always been very strong.

National affiliations are nothing new to Burnham. It has been affiliated with Chicago-based Oncor International for approximately 15 years. Oncor gives Burnham access to 200 markets around the world with 2,000 specialists that have handled more than $60 billion worth of real estate over the past five years.

David Matthes, Oncor president and CEO, said that Burnham was selected by his firm as an affiliate because its strength in the San Diego marketplace.

As for whether such partnerships are part of a nationwide trend, Matthes said real estate is and will always be a local business.

Other brokerages have been playing the national affiliation game.

Last March, locally based BRE Commercial announced that it had formed an affiliation with Northbrook, Ill.-headquartered Grubb & Ellis (OTCBB: GBEL) to create Grubb & Ellis/BRE in San Diego.

John Frager, Grubb & Ellis/BRE president and CEO, said his firm's affiliation with Grubb & Ellis gives his firm access to training programs and extensive databases that provide information sharing opportunities throughout the country. What's more, with different brokers in different cities having access to the same databases, multipronged transactions may be easy to conduct even if they are in multiple cities.

"This gives us a single point of contact," Frager said. "If we use the same system they use, it's so easy to pick up the phone and, whether they're in Newport Beach or San Francisco, we can be on the same page."

Frager also said just plain networking with the other Grubb & Ellis affiliates has been helpful.

"We just had a national conference in Las Vegas, and Grubb & Ellis has real strong education programs," Frager said.

A third San Diego-based commercial brokerage firm to form such a national affiliation is IPC Commercial, which is now known as GVA/IPC Commercial. That partnership was announced by IPC last January.

Jay Diskin, GVA/IPC president and CEO, said his affiliation with Evanston, Ill.-based GVA Worldwide has enabled his small firm to compete with the likes of CB Richard Ellis, Cushman & Wakefield and Colliers International. "It has helped us to level the playing field," he said.

Diskin said with direct access to 90 offices around the globe, his firm has access like never before. "This opens more doors for us. Now, we have a much greater opportunity to compete. It is up to us to capitalize on that."

Research:

Find more articles about Burnham Real Estate Services, GVA/IPC Commercial, Grubb & Ellis/BRE Commercial.

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