As this year’s List of L.A.’s top office/retail property management firms illustrates, consolidation in real estate ownership is translating to consolidation in the property management field.
However, that consolidation trend has affected L.A.’s top property managers in varying degrees.
Several of the big national firms that have acquired competitors during the last year have seen their local management portfolios grow since the Business Journal published its last List on Jan. 1, 1996.
On the other hand, several locally based firms have seen their portfolios shrink or remain stagnant.
The national firms that saw expansion include No. 2 Koll, whose L.A. County office/retail management portfolio grew from 12.1 million square feet a year ago to 13.6 million square feet; No. 3 Cushman & Wakefield of California Inc., which grew from 8.7 million square feet to 10.2 million; and No. 6 Insignia Commercial Group, which expanded from 6.6 million square feet to 7.3 million.
Other big national players whose local portfolios grew substantially over the year but not due to acquisitions are No. 10 Premisys Real Estate Services Inc. (to 5.9 million square feet), No. 13 Compass Management & Leasing Inc. (to 5.4 million), No. 14 Transwestern Property Co. (5.1 million), No. 15 LaSalle Partners, No. 17 Trammell Crow Co. and No. 20. Hines Interests L.P.
But the consolidation of real estate ownership into institutional hands isn’t necessarily good news for many of the locally based management companies.
Among those firms that saw their portfolios shrink or stay about the same were No. 4 Charles Dunn Co., No. 9 Voit Cos., No. 16 Watt Management Co. and even the nation’s biggest commercial property services firm, No 11 CB Commercial Real Estate Group.
A notable exception was West L.A.’s homegrown Tooley & Co. which retained its position at the top of the List.
Tooley, which specializes in high-end office complexes, saw its L.A. County management portfolio grow from 12.8 million square feet a year ago to 14.9 million through the week of Feb. 10.
And Tooley’s relationship with Wall Street’s J.P. Morgan & Co. whose affiliates have acquired Santa Monica’s Water Garden complex and Beverly Hills’ Wilshire Crescent building is about to expand the company’s local management portfolio by another 2.25 million square feet.
Tooley will take over management of Century City’s signature Century Plaza Towers twin highrise complex when a J.P. Morgan-managed investment fund closes its acquisition probably within the next few weeks.
Both Tooley and Koll are firms that have positioned themselves to compete profitably in “a tough, consolidating industry” as publicly traded real estate investment trusts, pension fund advisers and other institutions come to own even more real estate, said James Ewing, Koll’s L.A. divisional president.
Many of the REITs, as well as insurance companies, have set up in-house management subsidiaries, which means “third-party” management firms are often left out when those institutions buy trophy properties, Ewing said.
Next week: Women-owned businesses.