Diverse companies will dominate industry's future.

"Large, multi-faceted organizations which provide a wide range of professional services will dominate the real estate industry in the years ahead," Stephen B. Palmer, president of Paramus-based Alexander Summer Co., told a recent meeting of the NJ Chapter, Society of Industrial and Office Realtors (SIOR).

"Such firms also must have national - and international -capabilities through their own staffs or via strong links and affiliations with compatible overseas companies and professional trade associations through networking," Palmer added.

Along with Douglas H. Haynes, Summer Co. executive vice president, an expert in real estate finance, Palmer changed the clinic session's topic from "Surviving in the Nineties" to "Prospering in the Nineties," with a verbal road map to match.

Palmer said the day of the small-staff brokerage firm or one specializing in a single segment of the market is long past, and regional companies are competing for the same business. "The wider the company's range of services the more business it will generate. And while specialists are necessary, they are more valuable as players on large firm's professional term."

The Summer Co. president said major U.S. corporations and multi-national companies with diverse properties here and abroad prefer doing business with a single large real estate company with a full spectrum of capabilities to address their real estate problems and needs, rather than deal with several single-service companies.

Such diverse services could include, according to Palmer, office and industrial brokerage, asset and property management, construction management, new development and redevelopment, and assembling and marketing land parcels.

"Brokers must decide what role they intend to play in this changing real estate marketplace as small companies merge with other small companies to establish larger entities," Palmer noted, "in order to provide more services. Others are merging with large real estate organizations to achieve greater business."

And, he said, the best brokers are being attracted to larger companies, where they can thrive and practice their specialty, and utilize their talents to the best mutual financial advantage.

Haynes also views the emerging real estate marketplace, still undergoing restructuring, as one he describes by such buzzwords as single-source vending, seamless organizations, and global business. But, Haynes said, there will continue to be some demand, albeit limited, for technology-oriented firms providing certain niche services.

"At the Alexander Summer Co., we have channeled our business into two sectors: the institutional and the corporate," Haynes explained. "In that context we must be able to deliver services dictated by those clients and do business on a regional, national and global basis."

When you are offering the full-service approach, it doesn't matter whether the client is a corporation or a financial institution, Haynes said. "We have clients like Cigna, Connecticut Mutual, Mellon, UJB Financial, and they want full service from a single source, including management, leasing, construction management, tenant representation, and more - the entire menu."

Haynes reported that early in the recent cycle, single-asset bankruptcies, mortgage restructurings without new capital and other types of evasive tactics were possible, but not so today. He cited a recent mortgage restructuring handled by the Summer Co. as an example.

Involved was a largely rented Morris County office building with an above-rate, full-value mortgage. "We brought a financial partner into a joint ownership position, who paid down the loan to a level where the lender was comfortable," Haynes explained.

"Tax problems are solved. The investor gets a preferred return, and the Summer Co. continues to manage and lease the building," he continued. "By the end of the decade, there could be a refinancing or sale, which will make the transaction extremely profitable to all parties.