Winnipeg landscape shifting

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This article was published 04/08/2015 (3977 days ago), so information in it may no longer be current.

Last week’s shakeup in the local commercial real estate sector — in which two firms merged and another cut its ties with an industry giant — are isolated events and not part of a new trend, industry officials say.

Winnipeg’s Chartier family got the ball rolling when it revealed it was changing the name of its real estate firm to Capital Commercial Real Estate Services Inc., and would no longer be the local affiliate for CBRE Canada.

The change, which came into effect Saturday, left one of the world’s largest commercial real estate firms without a visible presence in the Winnipeg market. (But likely not for long: CBRE Canada president and CEO Mark Renzoni said the company hopes to open a local office this fall.)

It should be noted the main reason the Chartier family left the fold is because CBRE’s new global mandate is for all of its offices to be company-owned. The Winnipeg office had been the last independently owned affiliate in Canada.

Days after the Chartiers’ announcement, two other local companies — DTZ Winnipeg and Cushman & Wakefield Winnipeg — announced plans to merge their operations as part of a larger deal in which a newly created holding company — CW Winnipeg Inc. — will buy all three real estate services divisions of Winnipeg’s Stevenson Group for an undisclosed sum.

CW Winnipeg is owned by Stevenson Group executives Brett Ferguson and Curtis Loewen, and Martin McGarry, president of DTZ Winnipeg and MMI Asset Management Ltd.

In addition to Cushman & Wakefield Winnipeg, the new entity will also acquire Stevenson’s property-management division (Stevenson Management Services) and its real estate appraisals, consulting and tax-appeals division (Stevenson Advisors). MMI will also become part of the group.

McGarry will be president and CEO of CW Winnipeg and Cushman & Wakefield Winnipeg once the deal closes Sept. 30. He’s also a former chair of the commercial division of the Winnipeg Realtors Association.

He said seeing two significant changes in less than a week is unusual for Winnipeg’s normally staid commercial real estate sector. But he doesn’t think it foreshadows more big changes.

“I think it’s just coincidental that they both happened at the same time. It’s not part of any trend, in my mind. It’s two totally different deals done for two totally different reasons,” he said.

McGarry also noted the DTZ-Stevenson deal was driven by DTZ Winnipeg’s desire to grow the property management side of its business at a faster pace.

Acquiring another property management firm was the quickest way of doing that.

“Commercial property management, which is what we’re into, is really a volume business. You need to be in it in a big way in order to make a decent profit,” he said.

“Both companies (DTZ Winnipeg and Stevenson Management Services) truthfully could have survived perfectly on their own. But together… it probably means five to seven years of growth all in one fell swoop for both of us.

“So we sort of leap-frogged into the next level of service. You have more resources, you have more people, and it’s the reason most companies get bigger, right? It’s critical mass.”

Because of the recent announcement of a pending DTZ-Cushman & Wakefield merger at the international level, merging the two independently owned Winnipeg affiliates also made sense, McGarry said.

While he admitted it’s difficult to predict if there will be more acquisitions/mergers globally, McGarry doesn’t foresee more at the local level. Another former chairman of the WRA’s commercial division — Ken Jones of Shindico Realty Inc. — agreed.

Jones said there will now be four major players in the local market — Cushman & Wakefield, Colliers, Shindico and Capital Commercial — and they’re fully entrenched and doing well.

So there’s no need for them to merge with anyone else, he added.

He and McGarry said the next change will likely be CBRE Canada opening its own office here. But they both predict it won’t be easy establishing a foothold.

“Good agents are very, very difficult to find and good property managers are difficult to find,” McGarry said. “And it’s all about attracting the people.”

Both said it’s tough to lure good agents away from other firms.

“The firms that are here now are well staffed and doing fine, and nobody is looking, as far as I know, to switch too much right now,” Jones said.

 

Know of any newsworthy or interesting trends or developments in the local office, retail or industrial real estate sectors? Let real estate reporter Murray McNeill know at the email address below, or at 204-697-7254.

murray.mcneill@freepress.mb.ca