A year after London-based Savills PLC acquired New York’s Studley Inc., the commercial real estate firm finally has a solid outpost in lucrative Silicon Valley.
On Wednesday, Savills Studley announced it had acquired Cooper Brady Partners, better known for more than 15 years as Cresa San Jose and Cresa Palo Alto. The deal marks the end of an era for the region’s brokerage scene while highlighting the ongoing merger mania that is rapidly reshaping the industry’s fault lines.
“Worldwide consolidation going on. You can either choose to join the party or not,” said Michael Colacino, president of Savills Studley, in a phone call on Wednesday. “That was why we merged with Savills in the first place.”
The sale unites tenant rep Savills Studley, which has 27 U.S. offices, with the Valley’s largest pure-play tenant services firm. The two Cresa offices, with 21 brokers and 10 project managers, represent some of the region’s hottest tech and biotech tenants, with recent deals involving EMC, MachineZone, GlobalFoundries, MapR and BAE Systems. Cresa ranked No. 8 on the Business Journal’s 2015 ranking of brokerages by agent count.
Managing principals John Brady, Mike Michaels, and Mark Pearson are staying on under the new ownership.
Brady told me on Wednesday the sale made perfect sense, given both companies’ focus on tenants and complementary strengths.
“The truth is, Savills wanted a tech-based tenant-rep company, and with our presence in the Silicon Valley, and because of our tenant-rep model, we’re the ideally suited candidate to fill that spot in their domain,” Brady said.
“What I wanted was to land with a firm that was completely tenant focused,” he said. “And what I’m coveting about this change is that there’s an experienced and focused management team out of our New York office, as well as the London office, that gives us…the support services that we haven’t experienced before.”
Executives declined to release financial terms of the transaction. Brady has signed a four-year agreement to stay with the company, something he said “wasn’t even a concession on my part.” Commission splits aren’t changing materially, he said.
The acquisition can be seen as a big loss to the Cresa organization, which included nearly 60 affiliated offices throughout the country, all of them tenant-rep focused. Brady was a founder of Cresa, which stands for Commercial Real Estate Service Advisors, in the 1990s.
“It’s with some mixed emotions,” Brady said. “Cresa was an organization I co-founded. But we’re leaving for a better place.”
Acquiring the offices instantly gives Savills Studley a significant presence in Silicon Valley, something that has eluded the firm for some time. (Studley, before it was acquired by Savills, for years had an office in Palo Alto, but has not been a major player here.)
“We weren’t getting to where we wanted to,” Colacino said in an interview. “We stepped back and said, 'What’s the best approach?' You need some kind of scale. The Cresa office was perfect.”
A strong Bay Area team is critical because of the amount of business that firms here are doing, not just in Silicon Valley but around the country and the world. “You have, probably, the greatest engine of economic growth in the world there,” Colacino said...Silicon Valley tenant-rep stalwart acquired by growing brokerage
Related StoriesEB-5 Investment and the Impact on Commercial Real Estate
National Office Sector Report (Q4 2014)