Hennessy seeking market share with his Team Staubach.
President of the New York area operations of national real estate services firm Staubach, Hennessy is convinced that the company's exclusive focus on tenant representation and its culture of teamwork and collaboration can propel it to capture a market share greatly disproportionate to its relatively modest 65-member Manhattan workforce.
Hennessy envisions the company eventually on equal footing in the area of tenant representation with firms such as Cushman & Wakefield and CB Richard Ellis, brokerage titans who both command a dominant share of the New York City market. Despite the increasing muscle of the competition, as exampled by CBRE's $2.2 billion acquisition of Trammell Crow last week, Hennessy predicts that Staubach's lean and mean business model will nonetheless eventually capture 20% of the market.
It's a bold target, but valid in its attainability, Hennessy says, pointing out the firm's success in other major cities like Washington DC, Chicago, Los Angeles and, of course, Dallas, where the company is headquartered and where Roger Staubach, its founder and a former Super Bowl winning quarterback for the Cowboys, is an icon.
Now the firm's Manhattan office is beginning to track a path of growth similar to what it has done in those other markets. Hennessy estimates that the company's revenue has expanded by 65% over the last year, a dramatic gain that he attributes not only to the busy pace of leasing activity in the city, but also the growing pool of tenants interested in tapping a real estate services firm set up to solely focus on their needs and not a landlord's.
Staubach's focus on tenant representation is one of the essential characteristics that differentiate it from the competition. Most large brokerage firms in the city dedicate much of their resources to representing landlords, plum assignments because they often allow the broker to handle a number of leasing deals rather than just one deal, which would be the likely result of handling a tenant's search for space. Although landlord reps must typically market a space to fill it, in the current market where available space is becoming increasingly scant, many can afford to wait until tenants approach them--which can make landlord rep also somewhat less work intensive.
All the major firms represent tenants as well, of course. When a broker from a firm brings a tenant to a building that is represented by another broker of the same firm, a gray area is created, Hennessy says, where conflicts of interest can emerge.
"You have two brokers who are working for the same firm, of course there's going to be negotiation," Hennessy said. "But how hard is the broker really going to negotiate for the tenant? They both want to get the deal done. And if they're a big publicly traded firm that has to answer to Wall Street and whose earnings are closely examined, they have an obligation to get the deal done and that means that it may not be the best deal for the tenant. They say there are Chinese walls, but I don't think they always work. Who's their allegiance really to? We don't have problems like that and tenants know it and that's why they choose US."
Given the energy Hennessy displays when explaining the virtues of his company, it's not a surprise that he has some experience in marketing. Hennessy began his career in that industry but, after five years, decided he needed a switch.
"It came as an epiphany," Hennessy said. "I got up out of bed one morning and went downstairs and picked up the Times and noticed that I flipped right to the real estate section, that's what I always did and I realized that was what I was interested in. And I realized that if I had my druthers, that's what I'd be doing in my career."
Hennessy began in brokerage soon after and eventually joined Cushman & Wakefield. A busy dealmaker, he came to know Roger Staubach and in 1996, he and a group of other executives launched Staubach's New York office. In April, Hennessy was promoted to president.
An important factor to the firm's efficiency and success also acts as a governor on its growth, Hennessy admitted. The critical components of Staubach's culture are the open sharing of market information and the reliance on teamwork rather than a single larger-than-life rainmaker--a personality type that has been so exalted by the industry, it seems to have become the archetype for the Manhattan broker.
"We've established financial incentives for people to work together and share information, which is an operational kind of thing that not many other firms I know have done," Hennessy said.
But Hennessy said that the firm's operating style also make it harder to recruit brokers with the right personality and who will trust their coworkers enough to share market information that at another firm might be considered proprietary. "When we have an individual who worked on a particular assignment, he becomes a silo of information on how to do similar assignments and what's going on in the marketplace with that particular kind of tenant," Hennessy said. "You have to share that information to really become a top firm and do what's right for your clients, but you can't force it with people who don't believe in the culture. If you're a lone wolf that believes firmly in their own identity then this probably isn't the right place for you."
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|Title Annotation:||PROFILE OF THE WEEK: Peter Hennessy, President New York area operations Staubach|
|Publication:||Real Estate Weekly|
|Date:||Nov 8, 2006|
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