Orange County’s top brokerages took advantage of a white-hot market for apartment sales, strong demand for industrial buildings by owner-users and a healthy pipeline of business outside the county to post a second straight year of gains in 2011.
The number of sales and leases at the 20 largest commercial brokerage offices in the county rose to $15.5 billion in 2011 from $13.1 billion a year earlier, according to the Business Journal’s latest ranking of top commercial real estate brokerages.
That’s an 18% gain over year-ago levels and follows on a similar 18% increase in the prior year’s list.
The two consecutive yearly upticks follow 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 of transactions here were reported.
The highest tally from a similar Business Journal list was in 2005, when companies here worked on $20.7 billion in transactions. The latest annual ranking includes commercial property and land deals done in 2011 in OC, as well as those done elsewhere that were handled by local offices.
“There’s definitely more optimism in the market right now,” said Jeff Moore, senior managing director for CBRE Group Inc.’s OC operations. “All sectors are picking up from a year ago.”
“People are finding they can’t stand on the sidelines forever,” Moore added.
“The tide helped us all rise a little bit,” said Martin Pupil, regional managing director for Colliers International, the No. 7 company on this year’s list, with its Irvine office reporting $558 million of transactions.
Big Gains
Colliers reported a 27% year-to-year gain in 2011, one of 13 brokerages on the list to post volume gains. Seven of those companies posted a yearly uptick of more than 10%.
Investment sales in the $2 million to $10 million range were strong for Colliers, particularly for industrial sales to owner-users, Pupil said.
Apartment sales were also strong, he added, echoing a common refrain among several brokerages on this year’s list.
There were almost $54 billion of apartment sales nationwide in 2011, a 50% increase from the prior year, according to Real Capital Analytics Inc., a New York-based commercial property data firm.
Apartments now are trading at capitalization rates near 4%, Colliers’ Pupil said.
The market “was very hot last year, and it’s still very strong,” he said.
The boost in apartment sales added one local brokerage to the billion-dollar club last year. The Irvine office of Moran & Co., which specializes in apartment transactions, reported on working on a little more than $1 billion of transactions last year—a 52% year-over-year increase—that was good for the No. 4 spot on this year’s list.
Moran & Co. was one of four brokerages—along with CBRE, Voit Real Estate Services Inc., and Grubb & Ellis Co.—to crack the $1 billion mark in 2011. Six offices here broke the billion-dollar mark during the 2005 market peak.
Moran & Co. has worked local sales including Veranda Apartment Homes, a 128-unit complex in Fullerton that Irvine-based Bascom Group LLC bought for $20.4 million. It also is working on a project involving a 9-acre industrial site in Irvine near John Wayne Airport that’s being eyed for a 469-unit development.
CBRE, which has offices in Newport Beach and Orange, retained the top spot on this year’s list, with almost $3.8 billion worth of combined transactions.
CBRE Newport Beach
Eye-popping gains in CBRE’s Newport Beach office—the company’s West Coast operations hub with 84 brokers—helped make up much of the gains seen for the list as a whole. The brokerage’s Newport Beach office reported working on $2.7 billion worth of transactions, nearly double the amount seen there in 2010.
A “banner year” for CBRE’s retail investment team—which sold several notable shopping centers outside OC last year—boosted the Newport Beach office’s numbers, Moore said.
A string of high-profile area office sales also contributed, including The 2600 Michelson and 7700 Spectrum buildings in Irvine, as well as the 3 MacArthur Place building in Santa Ana.
Big-Ticket Deals
Larger-dollar transactions helped boost the bottom lines of most area brokerages, based on a reading of data submitted for the list.
The value of 2011 lease and sales transactions increased 18% over 2010 levels, but the number of leases signed actually fell a little more than 5%, and sales volumes also fell about 4.5%, according to the 20 top brokerages’ combined data.
The top 20 companies on our list reported employing a total of 689 brokers, flat from a year ago.
The largest decline in brokers, not surprisingly, was seen at Santa Ana-based Grubb & Ellis, whose two local offices saw a nearly 25% drop in brokers over the past year as the company’s well-documented financial issues played out. Most of those brokers were snapped up by rival companies.
Grubb & Ellis’ court-overseen asset sale to New York-based BGC Partners Inc., which also owns fellow brokerage Newmark Knight Frank, was approved last week. A decision on how the two brokerages’ operations will be combined has not yet been disclosed.
Download the 2012 OC’s TOP COMMERCIAL REAL ESTATE BROKERS list (pdf)
