Q&A With Sperry Van Ness' Canadian Expansion Point Men
Rock Advisors’ Derek Lobo and Jim Dimanis are leading Sperry Van Ness' Canadian launch, aiming to expand SVN’s footprint—and broker co-operation model—to 30 offices here in under a decade. We spoke to them about their plans.
Bisnow: How did this all come to be?
Jim Dimanis (pictured right): One of my mandates when I was hired (as COO) was to take our brokerage national, to have offices across the country and replicate the culture of collaboration and trust Derek has built at Rock Advisors. He'd been sending out emails with SVN videos attached (highlighting the firm's compensated co-operation model), saying, “This is who we aspire to be.” So I called SVN’s chief growth officer, George Slusser, and he said they were looking to come to Canada.
Then Derek and I went down to a conference in Florida and met a lot of their advisers and associates, and everybody was walking the talk: they had people there that actually enjoyed working with one another; more important, enjoyed working with people who would ordinarily be considered competitors. They recognized that at the end of day it’s just good for business. We thought, this makes a lot of sense, and decided we’d bring it up to Canada.
Above: An apartment building in Ottawa Rock Advisors recently sold to InterRent; the property was co-brokered with a local broker: “Two years ago we wouldn’t have done that,” says Derek.
Bisnow: You've said the traditional brokerage model is dysfunctional. How is compensated co-operation a better approach?
Derek: If you’re selling a home, the agent knows to put it on MLS. If it’s an office lease, and not a trophy property, brokers know to share the listing with other brokers. But in investment real estate, where there’s a supply-demand imbalance, the broker says I can generate three offers on my own with my pool of buyers. We’re saying why not generate 30 offers through other brokers?
It’s Economics 101, it’s about a free market, about enterprise. And if I get a listing and tell nobody about it except my 10 buyers, 20 buyers, how am I creating a free market? Competition drives value.
Jim (seen below with his late father Angelo): The defining feature of this model is that it is all about the client and gaining the most value for them; it's not about the broker and their commission.
Bisnow: Your goal is to extend the SVN platform across Canada and encourage brokers to franchise with the firm. What’s the appeal of joining the SVN fold?
Jim: We're bringing institutional-level services to the mid-market. That’s unique in our business. Typically if you’re an agent and a broker and you want really good tools, you can only get those with some of the larger brokerages, the big multinationals. SVN built this model that allowed franchisees to be able to compete with the big boys, but at the same time build enterprise value.
Derek: Rock Advisors has focused on multifamily, but we want SVN Canada to expand into other real estate classes, like self-storage, student housing and hotels. So we’ll be encouraging brokers with expertise in these areas to join the SVN brand. Let’s say you’re the No. 2 hotel guy at a large firm. Everyone knows the No. 1 guy, and you’re not getting any business, you’re getting his crumbs. If you came over to SVN, you could have your own shop.
Above: Derek and his expanding family, including daughters Vanessa, Rebecca and Teanna.
Bisnow: SVN is the sixth-largest CRE brokerage in the US, with 190 offices serving 500 markets. How will this benefit Canadian franchisees?
Derek: Canada is a pretty attractive place to invest. The biggest problem we have is that there’s not the network of brokers here there is in America. If you’re a mid-market investor in Canada and you want to buy something in America, it’s very difficult to buy a $5M to $10M property. Where do you start?
Well, we have 190 colleagues who co-operate, so we’re going to form another group, SVN Cross-Border, to allow Canadians to invest in America in the mid-market. And if we send someone down there we’re sure they’re going to compensate us, because it’s in our culture and DNA.