Brokerage set for rebrand as its president prepares for game-changing mergerIn his nearly 40 years in commercial real estate, David T. Houston Jr. has witnessed the evolution of both the industry and his own firm, Colliers Houston & Co.
Now Houston is about to take his brokerage through another dramatic change, as the firm prepares to merge with a new $400 million company.
On March 1, Teaneck-based Colliers Houston will officially merge with seven other large commercial real estate providers into a new company, to be called Cassidy Turley. Four of the firms are based in the eastern and central United States, and also had been part of the Colliers International network.
The merger has been in the works for the past 18 months, said Houston, 64.
“I wanted to get the firm to the next level … beyond growing it with one or two new salespeople a year,” he said. “How do we get this from a $10 million or $11 million company to a $20 million company in five years?”
With Cassidy Turley, “we will have their financial assets to call on, if we want to do something,” Houston said. “In Colliers, if we wanted to do something, if I wanted to go buy another company or start a line of business, I had to finance it myself.” And in being part of one large company, rather than an independent firm within a network, “your risk is spread out, you have resources you didn’t have before,” he said.
Colliers Houston will own about 6.2 percent and have 12 shareholders in the new company, which will be the largest employee-owned brokerage firm in the country and have a total of 360 shareholders, Houston said. Cassidy Turley will encompass 57 offices and 2,700 employees, and will manage 22,000 corporate facilities totaling 420 million square feet.
Following the merger, Houston said he plans to expand the firm’s personnel, which currently includes 37 brokers in offices in Teaneck, Parsippany and the Somerset section of Franklin. In particular, he is looking to increase the amount of space the firm manages in New Jersey, from 10 million square feet to 40 million, over the next five years.
“We’ve gotten a lot of calls from a lot of people, and I think we’ll get more,” he said. “Where else can you be an owner? We’re prepared to give people stock if they’re significant producers that can justify the compensation.”
Houston said he found out a month ago that Colliers International’s board had decided to terminate the license of Colliers USA — of which Colliers Houston is a shareholder — and awarded the license to FirstService Real Estate Advisors, which has purchased a 70 percent stake in Colliers International. FirstService Williams New Jersey, the local office of FirstService, will now serve as the New Jersey operations for Colliers International and adopt the Colliers International name.
Not much will change in the day-to-day operations of the firm, Houston said. “We believe in empowering people to do their jobs, and as long as you do your job, you can do whatever you want,” he said. To avoid building up a large overhead, Cassidy Turley will be decentralized and have a virtual headquarters, with the top personnel scattered across the country.
He doesn’t yet know what his new title will be, but Houston said, “all of my clients know me — everybody in the state knows me — and if I had no title on my card, I don’t think anybody would care.”
Despite Cassidy Turley being a brand-new entity in New Jersey, “I don’t think it’s going to be that tough to rebrand,” he said. The firm rebranded once before, from the David T. Houston Co. to Colliers Houston & Co. when it joined the network in the mid-’80s. Back then, “nobody had ever heard of Colliers,” he said.
Still, joining Cassidy Turley signifies a major change for a firm that has carried the Houston name since 1917, when E.E. Bond & Co. became Houston, Bond & Co. after Houston’s grandfather — also named David Houston — joined the company; the younger Houston joined the firm in 1972 and has served as president since 1978.
“I gave a speech the other day and somebody said, ‘Gee, you must be really sad. One hundred years, your name on the door,’” he said. But, “the only reason the name means anything is because of what it stands for” — integrity, hard work, service to clients, taking care of employees — and that “doesn’t change with a name change.”
More mergers are likely to occur in the commercial real estate brokerage industry, he said. “You’re either going to have to grow and have the capital to grow to provide the services that the major companies want, the way they want them, or you’re going to have to be the boutique firm that gets their business from their golf partners and their friends,” Houston said. With midsized firms, however, “people are writing their obituaries as they speak, because they’re just not going to be able to survive.”
Most of the independent, family-owned firms that dominated the industry when Houston started out have disappeared with the growth of regional and national companies and the advent of computers and better communications systems, he said. When he joined his firm in 1972, it focused purely on industrial real estate, since New Jersey had very little office space at the time. But Houston started building the company’s office division in 1981, just as an office building boom began to take hold in the state; today, about 50 percent of the firm’s business is in the office sector.
The merger into Cassidy Turley “is just another step to address change,” Houston said. “You can’t not react to change. Either you address it and hope you address it correctly, or you do nothing and go out of business.”
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