Los Angeles-based CB Richard Ellis tops the list with 18.7 million sq. ft. newly under management.

“Certainly, the current economic situation provided us with terrific opportunity to pick up leasing, management and disposition contracts,” said Samuel C. Delisi, a senior managing director overseeing the firm’s asset services.

2008 Fastest-Growing Managers

The integration of more traditional property-management services with investment sales and retail services have helped the company perform for a variety of owners: global banks and insurance companies, which require debt or equity restructuring; community or local banks, which are grappling with their construction loan portfolio; lenders dealing with the commercial mortgage-backed securities market; and pension funds, which also have restructuring needs, explained Anthony Buono, executive managing director of retail services for CBRE.

“The biggest sea change is the boxes being repositioned,” Buono observed. “I’m betting many of these properties have box issues. It’s back to basics, with properties being leased by local and national retailers and a regional grocer.”

CB Richard Ellis
Third-Party Retail Management and Leasing Contracts Awarded in 2008

And, in fact, the current industry difficulties offer another benefit for a firm as large as CBRE, Delisi said.

“This is going to give us the opportunity to recruit some of the best leasing people in the business,” Delisi said. “When you have great partners on the leasing side, it helps you on the management side. People look at us as a safe haven.”

Second-ranked Jones Lang LaSalle (13.7 million sq. ft.) began marketing its distressed property receivership services early, to great success.

Receiverships and foreclosures increased in third- and fourth-quarter 2008, leaving the new owners unhappily in charge of real estate they never expected to manage. Other lenders want the original owners to work out financial problems if at all possible, with JLL providing the needed management and leasing duties.

“You need to go in, solidify and stabilize the asset,” said Greg Maloney, president and CEO of Atlanta-based Jones Lang LaSalle Retail. “We put together a budget, try to stabilize a merchandise mix and grow the revenue where we can.”

This year, he added, should see an increase in its open-air management portfolio (now 5.2 million sq. ft.), as those owners also seek experienced hands to keep projects leased or improve them for sale.

“This is a great opportunity for people to go out there and make money,” Maloney said.

Plymouth Meeting, Pa.-based Fameco, which ranked third with 6.5 million sq. ft., has based its growth on a twofold strategy: strong leasing and management, said Larry Zipf, president, Fameco Management Services.

“The leasing piece is driven by our retail relationships,” Zipf said.

Fameco Management Services
Third-Party Retail Management and Leasing Contracts Awarded in 2008

And that will be useful, as the opportunity continues to grow as the store stock shrinks, even in the relatively insulated greater Philadelphia and mid-Atlantic areas.

“You have a ton of big-box availability,” said Brandon Famous, CEO, Fameco Real Estate. “There are certainly more leasing assignments ahead.”

Management opportunities also abound, as beleaguered owners look to outsource those duties due to the company’s experience and expertise, as well as its ability to reduce costs by pooling contracts for supplies and labor.

“Sometimes a regional landlord gets a little nervous when he has more vacancy than he expected,” Famous noted. “And then there’s Fameco.”

General Growth Properties’ management division has continued to grow despite its financial difficulties, adding 2.7 million sq. ft. to place fourth. Its most recent contract, announced in mid-November, awarded it management, leasing and marketing responsibility for Western Development Corp.’s Towson Commons in Towson, Md. The center is located near Chicago-based GGP’s Towson Town Center.

General Growth Properties
Third-Party Retail Management and Leasing Contracts Awarded in 2008

“General Growth has the experience and expertise to oversee the operations of a unique, mixed-used property like Towson Commons,” said Ben Miller, president, Western Development Corp., in the press release announcing the appointment. “Since 2007, GGP has successfully managed The Shops at Georgetown Park for us, and we are pleased to bring them on board for this additional project.”

Other properties brought into the management portfolio are University Mall in Tampa, Fla.; Branson (Mo.) Landing; Kapolei (Hawaii) Commons; and Kings’ Shops in Waikoloa, Hawaii.

Another method of increasing business is to retain management of a property that’s been sold, as Sembler Co. can attest. The St. Petersburg, Fla.-based company placed fifth this year with 2.0 million sq. ft. of new third-party contracts.

In October, Sembler announced it had sold its 1 million-plus sq.-ft. Winter Garden (Fla.) Village to Cole Real Estate Investments for $180 million. Cole, which placed first in the fastest-growing acquirers’ category for 2008, then retained Sembler to manage the property.

The Sembler Co.
Third-Party Retail Management and Leasing Contracts Awarded in 2008

“We have picked up third-party from other owners” as well, said Greg Sembler, CEO. “We were pretty fortunate last year. We developed a lot of property in Florida. But things are difficult right now, hence our focus on third-party management.”

The company recently brought Stevens Tombrink on to fill the newly created post of VP business development to expand the firm’s third-party portfolio. The opportunity should continue to grow, even as the economy stabilizes and development begins to pick up, Sembler said.

“There’s $1.5 trillion of commercial real estate development” extant, Sembler noted, much held in CMBS pools that will have to be refinanced sooner rather than later. Those new owners may need third-party managers.