Eastdil tops CB, secured in broker ranking

Real Estate Alert, Feb 4, 2004

Eastdil Realty, buoyed by a huge year in Manhattan, recaptured the crown of most-active broker of large office properties in 2003, while defending champ Cushman & Wakefield tumbled to fourth place, according to Real Estate Alert's Deal Database.

Eastdil handled $5 billion of U.S. transactions, up 49% from $3.3 billion in 2002, when it ranked second. That enabled the firm to rack up a 17% share of the national market--based on brokered transactions of $20 million or more (see tables on pages 7-11). Eastdil has now won the crown in two of the past three years.

CB Richard Ellis maintained its No. 2 ranking, with $4.1 billion of activity, up from $3.1 billion in 2002. Secured Capital climbed up one spot, to third, with $2.61 billion of volume. That enabled it to inch past Cushman, whose volume fell 45%, to $2.58 billion from $4.7 billion. Cushman's activity sagged in several markets, including New York and Chicago. Holliday Fenoglio & Fowler rounded out the Top 5, with $1.6 billion of office transactions.

The top regional brokers were Cassidy & Pinkard, which finished 10th based on activity in the Washington metropolitan area; Cornish & Carey/Oncor International, which ranked 16th, thanks to activity in Northern California; and Madison Partners, which placed 18th on the strength of Los Angeles-area deals.

Ranked by number of transactions, CB was the clear-cut winner, with 84 transactions, followed by Cushman (56), Trammell Crow (42) and Eastdil and Secured (29 each). CB was also first in 2002, with 78 transactions.

Overall, the volume of office sales, including nonbrokered deals, jumped by a revised 8.5%, to $36.2 billion from $33.4 billion (preliminary figures published in the Jan. 14 issue showed a 3.9% increase). The number of deals rose by 4.8%, to 525 from 501.

The amount of business that brokers competed for rose even faster. There were $29.2 billion of brokered sales last year, up 10.2% from $26.5 billion in 2002. Brokered deals accounted for 80.7% of total sales, up from 79.4%. The number of brokered deals soared by 16.3%, to 464 from 399.

The largest transaction of the year was Harry Macklowe's $1.4 billion purchase of the General Motors Building in Midtown Manhattan. One other deal was close to the $1 billion threshold: the $910 million acquisition of the John Hancock complex in Boston by Beacon Capital Partners and Lehman Brothers. There were 20 sales of $200 million or more, down from 27 in 2002.

New York was again the busiest market in the country, with $6.7 billion of activity, down slightly from $6.8 billion in 2002. Lower Manhattan saw its first significant increase in sales since the 2001 terrorist attacks, with a handful of deals.

Washington ($3.75 billion) and Los Angeles ($3.66 billion) followed, each posting significant gains from 2002. While they lagged behind New York in terms of sales volume, each had more transactions. Los Angeles led the way with 58 deals of $20 million or more, followed by 48 in Washington and 42 in New York.

Chicago ranked fourth in volume, with $2.1 billion of activity, down 25% from 2002. Northern Virginia ranked fifth, at $1.9 billion, up 27%.

Cushman, CB and Secured each were the most-active broker in four of the top 20 markets. Eastdil and Holliday Fenoglio each led in two markets. Morgan Stanley, Cassidy & Pinkard, Cornish & Carey and Colliers International's Spaulding & Slye each won one.

Eastdil dominated in New York, where its $3.1 billion of activity quadrupled CB's total. But Eastdil finished first in only one other major market, Philadelphia. CB led the way in four smaller markets: Orange County, Houston, Dallas and Sacramento. Cushman was the victor in Northern New Jersey, Atlanta, Denver and suburban Chicago. Secured won in Los Angeles, San Diego, Oakland/East Bay and Chicago--thanks to the $465.5 million sale of Aon Tower. Holliday Fenoglio won in Northern Virginia and South Florida.

CB's sharp increase in activity last year was not inflated by its July acquisition of Insignia/ESG. Insignia's $869.8 million of activity prior to the merger was counted separately, putting it in 11th place for the year. The merger should bolster CB's volume this year.

Cushman's activity fell in several markets, including New York (down to $60 million from $412 million), Chicago (to zero from $928 million), Boston (to $48 million from $430 million) and South Florida (to $51 million from $298 million). In New York, the firm saw a drop-off in part because it was still regrouping from the loss of heavy hitters Darcy Stacom and Bill Shanahan to CB. In Boston, Cushman and several other brokers took a back seat to Morgan Stanley, whose listing for the Hancock complex accounted for nearly 70% of the market's brokered volume. In Chicago, several large assignments went to rival brokerages--including Aon Tower.

"Investment sales is a cyclical business," said Cushman executive managing director Tim Welch. "Cushman & Wakefield had an excellent year in 2002, and we have a tremendous amount of business in the pipeline for 2004. We expect to have an outstanding year."