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Avison Young Adding 235 CRE Pros In Major Acquisition From Madison Marquette


The age of the commercial real estate brokerage mega-merger may be over, but service firms continue to seek ways to grow through strategic acquisitions.

The latest example: Toronto-based Avison Young has agreed to acquire the office and industrial property management, agency leasing and project management service lines of Washington, D.C.-based developer Madison Marquette, the firms announced Thursday.

Madison Marquette Chairman Amer Hammour

The acquisition and partnership deal, expected to close by September, will beef up Avison Young's brokerage and management presence in Texas and California and on the East Coast. The deal is expected to bring more than 20M SF of properties under management and add 235 team members, ranging from brokers and managers to engineers and accountants, in 11 states, according to a press release.

Terms of the acquisition weren't disclosed as of press time.

Madison Marquette CEO Vince Costantini told Bisnow in an interview Thursday that the firm’s decision to sell its service lines was mainly due to the competitive nature of the global commercial office brokerage business.

“We made a decision six months ago that the office service sector is increasingly dominated by giant firms that are throwing massive amounts of technology at it. It's hard to compete as a smaller player,” Costantini said. “In retrospect, the amount of scale you need is huge. You need 100M SF. Going from 20 to 40 is not enough.”

Instead, Madison Marquette plans to sharpen its resources on investment management and advisory services focused on the retail, mixed-use, multifamily, office, medical, and senior living categories, Madison Marquette Chairman Amer Hammour said in a press release.

“We kept the management teams, the leasing teams, that are focused on retail. We have a long history. We're very good at it,” said Costantini, who became CEO in 2019.

Key leaders from Madison Marquette joining Avison Young include Wade Bowlin, who will be named principal and managing director, Brenda Dougherty, who has been tapped as principal and director of Texas real estate management services, and Jim Proehl, who is joining as a principal and Western region director.

Avison Young has no potential lay-offs due to this acquisition of services, the firm's spokesperson, Sandra Hill, wrote in an email. The two firms also plan to partner, with Madison Marquette leveraging Avison Young's data analytics, technology, and global real estate intelligence platform for Madison Marquette's roster of clients.

"What’s really unique about this transaction is that it doesn’t end with the closing of the acquisition," Hill wrote in the email. "It’s a partnership with Madison Marquette, enhancing the potential of our revolutionary data platform, AVANT, as an investment tool."

Avison Young will inherit management or leasing of 11.2M SF in 54 properties in Houston, nearly 1M SF in 14 buildings in Dallas, 4.2M SF in 27 buildings in California, 2.5M SF on the East Coast and 1.2M SF of mainly Class-A office buildings in Downtown Honolulu, according to the release. Avison Young also will take over the management of nearly 170 ongoing projects. 

Madison Marquette's sale of its office and industrial divisions comes more than four years after the firm merged with PM Realty Group, a $7B marriage which, at the time, was hailed as a way for Madison Marquette to grow in markets it had long wished to expand in, including Atlanta and Dallas.

The PMRG merger also gave Madison Marquette — known primarily for its retail and mixed-use projects such as The Wharf in D.C. — a more diverse platform for other commercial real estate assets, including office and medical real estate. Many of the professionals who came aboard to the firm from PMRG are now headed to Avison Young.

“I don't think the new [Madison Marquette] ownership ever really wanted to be in the office, industrial and property management business. They're really more retail-focused,” said Bill Weghorst, who retired as Southeast president of property services for Madison Marquette last year and came to the firm in the PMRG merger. “So shedding that business just seems to make sense. They can focus on their high-end retail.”

News of the acquisitions comes weeks after Newmark CEO Barry Gosin threw cold water on rumors about a possible Newmark and Cushman & Wakefield merger. Industry analysts told Bisnow that big brokerage houses are more likely to focus on acquiring regional firms, specific teams and service niches to reinforce weaknesses in their existing platforms.

“The strongest market Madison still has is the original headquarters of PM Realty Group, which is Houston. This allows [Avison Young] to bolster up a big, major market,” Weghorst said. “Anytime you can add property management, that just adds to the bottom line.”

The proceeds from the sale will be poured into Madison Marquette’s investment pool for future co-investment acquisitions, especially as rising interest rates and cap rates are creating new opportunities, Costantini said. Some of those opportunities include converting more office buildings into residential or mixed-use projects.

“We see a couple of different opportunities in residential and retail,” he said. “In fact, there are some opportunities that are growing because the market is unstable right now.”

UPDATE, AUG. 18, 3:45 P.M. ET: The story has been updated to include comments from Madison Marquette CEO Vince Costantini.