How to Beat the Commercial Real Estate Big Boys
These three entrepreneurial brokerages are taking on the top firms.
By Christine Perez
D CEO MAR-APR 2012
The last decade has brought profound changes in the North Texas commercial real estate scene, with firms merging,
launching, growing, and falling apart. This year should bring continuing shifts, as the competition heats up for both talent
and market share.
Two firms that ruled Dallas real estate 10 years ago—The Staubach Co. and Trammell Crow’s brokerage group—no longer
exist, having been merged into Jones Lang LaSalle and CB Richard Ellis, respectively. CBRE (with TCC) has maintained
about the same number of local brokers since 2001, but Jones Lang LaSalle (with Staubach) has diversified and added more
than 40 professionals.
According to D CEO research, JLL now leads Dallas-Fort Worth with 155 local brokers; CBRE is close behind with 148.
No. 3 Transwestern has more than doubled in size since 2001, from 47 to 105 local brokers, due in part to a 2005 merger
with NAI Stoneleigh Huff Brous McDowell.
Firms to watch this year include Colliers International, which recently named a new managing director, David Pinsel, and
made several key hires, including agency leasing specialist David Quisenberry; and Cresa Dallas, which has also lured a
number of top brokers to its ranks, including office tenant rep Lance McIlhenny.
Cushman & Wakefield lost several heavy hitters in 2011—and also parted ways with former managing director Liz Trocchio.
(As of press time, the firm had not yet named a replacement.) Grubb & Ellis has seen some departures, too, as it continues
to search for an infusion of capital or a new owner.
Competing against the two giants—JLL and CBRE—isn’t easy, but several North Texas operators are gaining momentum.
Here, we profile three of them: Cassidy Turley, Stream Realty Partners, and CASE Commercial Real Estate Partners.
Cassidy Turley
In the 1990s, Johnny Johnson, Chris Taylor, and Bret Bunnett built a strong office leasing group for LaSalle Partners in
Dallas. But after the company went public in 1997 and merged with Jones Lang Wooten in 1999, things changed. And
in March of 2000, the trio, along with JLL property management exec John Patterson, launched their own firm, Capstar
Commercial Real Estate Services.
“In the latter years that we were at LaSalle, the firm was acquiring companies, merging with companies, and going public,
and there was a great deal of energy being expended to accomplish those things,” Bunnett says. “We wanted to take that
energy and redirect it to serving clients.”
For Johnson, it was a chance to get back to the core of why they got into the real estate business in the first place. “We grew
up being specialists, in a culture where you stayed focused and grew in a specific discipline,” he says. “[LaSalle] changed a
lot after we went public. For some of us, particularly Chris and me, we were getting farther away from the transaction side
and client focus to more people- and management-focused. We wanted to get back into the real estate game.”
Another factor that came into play was staving off competitors that regularly tried to break the team apart. “We had such
great chemistry as a group,” Bunnett says. “I felt that if we wanted to keep the band together, we had to do it with an exciting
new venture.”
Out of respect to the success they had at LaSalle, the foursome didn’t try to compel JLL clients or employees to join them.
Turns out, they didn’t need to. Young talents Trey Smith and Jay Bailey jumped ship, and many key accounts made the
switch, too.
“Humbly, we had clients in the market who called and said, ‘We heard you started your own company; we want to be one
of your first customers,’ ” Taylor says. “Our clients have helped us build our company—period.”
In the ensuing decade, the Capstar partners were consistently approached by national firms that wanted to merge the
successful Dallas group into their organizations. But there was no motivation to do so, Bunnett says. “We were enjoying
what we were doing, we were having success, and we saw a bright future ahead.”
Then in April of 2010, execs from Cassidy Turley called. Bunnett and company agreed to a meeting, mostly to be polite and
to meet others in the industry. But to the partners’ surprise, they liked what they heard.
Cassidy Turley was formed in the fall of 2008 through the merger of four Midwest and East Coast firms. It has quickly
grown to 3,500 employees in 60 offices. The private concern is owned by firm partners; its largest shareholder, CEO Mark
Burkhart, has just a 4.5 percent stake.
The Capstar execs liked the ownership structure, and felt Cassidy Turley offered what LaSalle had provided in the early
days—a chance to help develop an international company with solid leadership and systems, but one that embraced the
notion that real estate is a local business.
Bunnett says Cassidy Turley was determined—it was going to be in Texas, and in a big way. “We finally realized that we’d
rather be on the inside looking out, than on the outside, wondering what we missed,” he says.
Capstar was merged into Cassidy Turley in January of 2011. As part of the deal, the Dallas group was given the responsibility
of expanding into new service lines (beyond its core of office leasing and management) and growing the firm’s presence
throughout Texas. Already there have been some major wins. Last fall, a four-person group led by heavy hitters Greg Biggs
and Randy Cooper joined from Cushman & Wakefield to develop the Texas tenant rep team; and Blake Anderson joined
from Grubb & Ellis to launch the firm’s industrial group.
During 2011, the firm’s first 12 months as Cassidy Turley, it added a whopping 7 million square feet to its leasing portfolio—
including 430,000 square feet from Equity Office Properties (part of a 3 million-square-foot national package), and the 1.2
million-square-foot Fountain Place, a downtown icon sold by Crescent last year to JPMorgan. Cassidy Turley Texas now
oversees 22.8 million square feet in Dallas and Houston, including about 1 million square feet of industrial space.
To celebrate its one-year anniversary, the group moved into snazzy new Preston Center digs in January. The 15,700-squarefoot office is much larger than the 10,000 square feet it previously occupied at 3500 Maple Avenue.
“We’ve got a nice new office with plenty of room for growth,” Johnson says. “There’s a lot of enthusiasm within the
organization—and a lot of intrigue in the market.”
Stream Realty Partners
For seven years, Lee Belland and Mike McVean brokered lease deals for Trammell Crow Co., sitting at adjacent desks in
the firm’s signature newsroom-style office on the 37th floor of what’s now Chase Tower. The duo liked the Crow model so
much, they used it when they launched Stream Realty Partners in August of 1996.
“Both of us are children of entrepreneurs, so we both thought we’d have our own firms one day,” Belland says. “We’d have
conversations and it got to a point at Crow where Mike wrapped up a bunch of business, and it was time for him to go. I still
had a lot of stuff I was working on, but I left anyway. He helped push me out the door.”
The initial plan was to make real estate investments on their own behalf. The partners made their first acquisition in December
of 1996, paying $920,000 for a 26,500-square-foot office/warehouse bulding at 1451 Empire Central. Shortly thereafter,
they moved into the building.
It was a far cry from life in a shiny downtown highrise. “We closed on the building on Dec. 26, the day after Christmas,”
McVean says. “We spent New Year’s Eve tiling the bathroom floor and clearing out the old tenant’s crud. When you own
your own business, you do everything.”
Another acquisition followed six months later. That led to the hiring of a few leasing and management professionals—and
sparked an evolution of the firm’s business plan, which is based around a services core. Stream also develops and continues
to opportunistically invest in real estate, often in partnership with entities that become customers.
From the beginning, Belland and McVean honed in on talent—whether or not they had a position to fill. “Some of our total
rock stars today came to Stream when we had nothing for them to do,” McVean says. “We’d meet them and say, ‘This person
is just incredible; they must come join us.’ ... It’s the total opposite of the approach most other firms take. Even when we
were broke, we still did it.
“We’ve learned that there are three things that drive the success of Stream,” he says. “In the order of least to most important,
they’re buying buildings, winning business—leasing, management, tenant representation, and investment sales—and, No.
1, people. Find the people, bring the people, develop the people, and provide an atmosphere that, in their minds, makes
Stream irreplaceable.”
The firm’s expansion has been driven by its professionals, McVean says.
“Once Lee and I got the Dallas office up and running—we felt we did pretty good; matter of fact, we felt like we kicked
everybody’s butts for a few years there—we decided to go into different cities and product types,” he says.The company
hired Chris Jackson to launch an industrial group. (He now oversees Dallas operations.) Other local team members were
given the opportunity to open offices in other markets—and get a “meaningful” ownership stake in those posts. Those who
venture out replicate the experience Belland and McVean had in launching the firm.
“When they go through the same hardships, they experience the pride that comes from building something out of nothing,”
McVean says. “The end result of that entrepreneurial experience is that you sleep with the comfort of knowing, ‘I can do
this. I’m never going to have to doubt myself again. I’m never going to have to work for anyone else again, unless I want
to. I’m going to be fine.’”
Early hires have since become “second-generation” leaders within the organization. Those individuals, in turn, are training
and nurturing the third generation. “We’re taking all of this from Trammell Crow; this is what he did,” McVean says. “We’re
copying it—with his blessing.”
One area that has worked out particularly well for Stream is data centers. The company got into the field relatively early—in
1999. As he was going about leasing office space, Belland says tenant brokers kept asking about data-center availability.
He had no clue what they meant.
Then one day, McVean was out driving the market, and noticed a big sign off Stemmons that said, “Data Center for Sale.”
It was a 1960s building that EDS had converted into a data center.
The partners put it under contract, and inked a 15-year lease to AT&T before the acquisition closed. Rob Kennedy, one of
Stream’s “talent hires,” decided there was an opportunity there, and found another data center nearby. Stream bought it and,
again, leased it while it was still under contract, this time to Nokia.
Since then, the company has become an active national player in the data-center space, as both an investor and a developer.
“In addition to us being tuned into supply and demand, we might credit [CB Richard Ellis vice chairman] Jeff Ellerman for
his choice of words on that sign: ‘Data Center for Sale,’” McVean jokes. “That really started it all.”
Today, Stream has more than 370 employees in six markets: Dallas, Houston, San Antonio, Austin, Atlanta, and Orange
County, Calif.
The Stream co-founders say they’re a bit surprised at how well they’ve done and how big the company has become. They’re
most proud, they say, of the wealth they’ve helped create for those who aided them in building the business.
“There are a whole lot of millionaires who work here with us—a lot; [some are] multimillionaires,” McVean says. “We’re
proud of the fact that we’ve given people an opportunity and shown them how to get real rich. When you see that happen to
people and see them get that sense of comfort and peace, that’s pretty gratifying.
“Lee and I started Stream, but we’re all a part of it now. It’s not just us doing for them; it’s them doing for us, too.”
CASE Commercial Real Estate
When John Conger graduated from Southern Methodist University in 1979, few careers held more allure than commercial
real estate. “Coming from a smaller town, seeing all of the highrise buildings under development downtown was quite
a sight,” he says. “Half of Dallas was built at the time. Cranes were everywhere. Leasing highrise office space was a
glamorous job for a young kid; I had to be a part of it.”
Conger has focused on project leasing ever since, joining Dallas real estate developer and investor Bill Cawley about 15
years ago to run Wilcox Realty Group, a services firm Cawley had acquired from Ray Hunt.
Tom Sutherland, meanwhile, got his start in 1984. He had always been intrigued by the industry, studying architecture and
construction, along with marketing, at Texas A&M. He went to work for a retail developer out of school, but within a couple
of years, the Dallas real estate market began to crumble. Sutherland decided to get out.
In an interview with Pitney Bowes-Dictaphone, the manager eyed Sutherland with suspicion. “He told me, ‘All signs are
pointing to the decision to hire you. My only reluctance is, it has been my experience that a guy who has been in real estate
won’t ever get that out of his blood,’” Sutherland says. “I told him, ‘Hell, no! That business is crazy!’ I got the job. But seven
years later, I walked into that manager’s office and told him he was right: I had to get back into real estate.”
This time around, Sutherland focused on office tenant representation. “At Pitney Bowes, I had been calling on downtown
law firms, selling them little $500 dictaphone systems,” he says. “I figured, why not sell them real estate services and make
much bigger fees?” He joined Fults Cos., then shifted to CB Richard Ellis in 1997. At the time, CBRE “was a sleeping
giant,” Sutherland says. “It was a large national firm, but its Dallas office was relatively small. I thought I was catching the
wave at the right time; they were putting a lot of money into growing their local operations.”
He worked under manager Ran Holman, doing tenant rep and forming the company’s high-tech practice group. CBRE made
good on its promise to grow. When rumors began flying about a merger with Trammell Crow, Sutherland decided to look
around at other options.
“I thought, ‘This is great for CB and great for shareholders, creating this global brand, but the reason I got into real estate was
because I liked the local flavor and the entrepreneurial side of it,” he says. “CB was getting so corporate, I was beginning to
feel like a number. By this time, Ran had moved over to Cawley; I talked with him and with Bill, and decided to join, too.”
Conger was running the management and leasing side; Sutherland stepped in to run the tenant rep and brokerage group.
As Cawley began to focus more on his investments and development arm, Cawley Partners, the two division heads made a
pitch to buy out the services group, which was then called GVA Cawley and affiliated with the GVA Worldwide network.
“We had a willing seller and willing buyers,” Conger says. “Bill understood that for Tom and me to run it best, having
ownership was the way to go, and he agreed to sell it outright.”
The ownership change happened in April of 2008. The first year wasn’t easy. Not only did the duo have to deal with the
ensuing economic depression, they had personal trials as well. After a dinner with Conger to celebrate the new venture,
Sutherland came home to find his wife collapsed on the bathroom floor. They later learned she had a brain aneurysm and
needed emergency surgery. Shortly thereafter, Conger’s brother’s battle with cancer took a turn for the worse. He died in
early 2009; Sutherland’s wife passed away in January 2010.
“It was a tough time, but from a financial standpoint, we had a good 2008,” Sutherland says. “In 2009, we started talking
about what we wanted to be. Initially we had kept everything as is, for stability’s sake. But in 2009, we knew the GVA
affiliation was going away, and that it would be a good time to change the name of the firm.
“We also were talking to Cassidy Turley and going back and forth,” he says. “When the calendar turned to 2010, we were
still thinking about that. But John and I decided that we were just too new into this to make such a big change. And neither
of us wanted to be part of anything too global. The whole situation caused us to sit down and figure out: ‘What do we want
to be?’”
In the end, the duo decided to focus exclusively on Texas. Not only did it fall in line with their goals and interests, but all
trends are pointing toward continuing growth and prosperity in the state. In August of 2010, they renamed the firm CASE
Commercial Real Estate Services, with CASE being an acronym for Conger and Sutherland Enterprises.
Since then, they’ve been on a hiring spree, making five new hires in December alone, bringing the total to about 75 people.
The firm also has expanded geographically—CASE now has offices in Fort Worth, Austin, and San Antonio, with Houston
the target for 2012—and diversified.
“Our health care, data center, and land services groups have helped get us through the tough times,” Conger says. “If you
diversify, at least three of the eight specialties in different years are going to be flourishing—hopefully eight of the eight.”
One thing that hasn’t changed, he says, is the culture. “I give Bill Cawley credit for creating a culture that promoted the
entrepreneurial spirit, and we’ve carried that forward,” Conger says. “We have an atmosphere where anyone can talk about
ideas, and if they’re good, we’ll pursue them.”