Orange County’s largest commercial brokerages continued to benefit from investor interest in local properties in 2013, and to a lesser extent, tenant demand.
Sales and leases at the 21 largest brokerage offices rose to nearly $18 billion from $15.9 billion in 2012, according to the Business Journal’s latest ranking of brokerages.
That’s a nearly 14% gain and the fourth year in a row that area brokerages have reported year-over-year business jumps.
The ranking includes local offices’ commercial property and land deals in OC and elsewhere.
The streak of annual upticks follows four years of declines as the local brokerage industry felt the brunt of the commercial real estate downturn.
Deal activity bottomed out in 2009, when about $11.1 billion in transactions here were reported. Business for the area’s largest brokerages has since increased by more than 60%.
It was a year of across-the-board gains for a bulk of the companies on the list. Eighteen reported year-over-year gains, 12 of them by more than 10%.
The source of business has changed since the recovery began, said managing directors of several of the area’s larger brokerages.
Two or three years ago, it was “big business” that was driving the local real estate growth, said Kurt Strasmann, senior managing director for the OC operations of CBRE Group Inc. “Now activity is much broader-based.”
Jeff Ingham, senior managing director for the Irvine office of Chicago-based JLL, has also noted changes.
“Now that the economy has stabilized, small and entrepreneurial companies are starting to grow again, along with big companies,” he said.
Companies reported working on a little more than 7,000 leases last year, only about 1% more than in 2012.
Sales of pricier properties, including trophy offices, large distribution buildings, big chunks of land, and apartment complexes, appear to have boosted the bottom lines of most brokerages. Activity was up about 6% from year-ago levels in terms of total transactions.
Early returns suggest 2014 could prove to be another strong year, said brokerage officials.
This January, “we came out of the gates strong, well above our expectations,” said Jim McFadden, senior managing director for the Irvine office of Cushman & Wakefield Inc.
Cushman & Wakefield’s local office, which retained the No. 7 spot with an estimated $935 million in local business, is expecting growth this year from its capital markets team and its property management and corporate services group.
CBRE Tops
CBRE maintained the No. 1 spot on the list, with a combined $3.2 billion in transactions reported from its Newport Beach and Orange offices. That’s up about 6% from year-ago levels.
“It was a great year for us,” said Strasmann, who cited strong results for CBRE’s capital markets team and its industrial and office tenant representation business.
• JLL, which recently shortened its official name from Jones Lang LaSalle, took the No. 2 spot, up from No. 5, with $1.56 billion in local deals last year.
The 41% jump resulted from its addition of brokerage teams over the past two years and “a lot of hard work” from leaner years finally paying off, Ingham said.
• The brokerage with the largest jump in business was the Newport Beach office of Newmark Grubb Knight Frank, which reported doubling activity, with $988 million worth of deals, good for the No. 6 spot.
The increase resulted largely from improved sales volumes and a generally improving local economy, said NGKF Managing Director Greg May.
Industrial sales in particular were “through the roof” last year, he said.
The global healthcare services team of New York-based NGKF, based out of its Newport Beach office, has handled a number of recent large medical-related property transactions, including $41 million in office sales in San Clemente, Aliso Viejo and Oceanside.
This year, NGKF expects its OC office to increase business in leasing and sales of retail properties following the addition of brokers, May said.
Land brokerages also had big gains last year, benefiting from a flurry of cash-flush homebuilders’ buys.
• The Irvine office of Land Advisors Organization reported a 97% increase in business. It had $743 million in deals, good for the No. 9 position, up nine spots.
It’s the first time in several years that a brokerage working exclusively on land deals has cracked the top 10.
Land Advisors already hopes to top 2013’s figures this year with the listing for large properties, including the Marblehead property in San Clemente, which is expected to sell for about $200 million.
• Another Irvine land brokerage, The
Hoffman Co., took the No. 17 spot after a nearly 29% increase in business to $450 million.
