At a time when some local commercial brokerages are struggling to make deals, the principals of LandQwest Commercial, LLC in Fort Myers are moving ahead with expansion plans. Given the current economic environment, that’s an especially ambitious undertaking for an independent that opened just as the market was contracting. However, the downturn has had little effect on the company’s growth.
In the next 12 months, LandQwest expects to add at least six licensed agents to its current roster of 13, as well as additional support staff. “We have enough business that we’d expand right now if we had the space,” said managing principal Stephen A. Cunningham, MAI, CCIM. Soon they will.
For the past year, LandQwest has been looking to expand from its current 2,500sf office on Big Pine Way, adjacent to the Bell Tower Shops. That’s where LandQwest founders John Mounce and Rokki Rogan officially launched the full-service commercial brokerage company in January 2006. Now the company is in the process of negotiating to either lease or purchase upwards of 5,000sf in order to consolidate operations, now split between two locations.
“Two-and-a-half years ago, we were four people creating a business plan,” said Mounce. “Now we are the parent corporation of three related but separate companies.” Besides commercial brokerage, LandQwest also offers asset recovery and property management services, both of which are rapidly expanding.
Market domination was never Rogan and Mounce’s vision for LandQwest. From the onset, their goal was to maintain a mix of quality listings and tenant representation assignments, many of which stemmed from Mounce’s long-term relationships with national retailers.
Nurturing significant, enduring relationships has allowed LandQwest to capitalize on the types of assignments that most local and regional firms aren’t qualified to handle. “Real estate is a relationship-driven business,” Mounce said. “It’s not a matter of whose flag you’re flying, it’s a matter of the contacts that you and your agents cultivate. That’s the key to success.”
After only one year in business, the company boasted a sales and leasing portfolio of more than one million square feet of commercial space, with just over 500,000 square feet under management. Since then, LandQwest has standardized its brand name and look by bringing in-house some of the functions it used to outsource. For instance, as the company’s marketing director, Beth Cary advertises and markets all of LandQwest’s assignments and listings, while Director of Public Relations Raquel Torres promotes the company and its services via print and electronic media.
Today its commercial property listings exceed $150 million and its management portfolio has grown to more than one million square feet.
National-Caliber Service
Historically, LandQwest’s core clients have been well-known, national retailers seeking market expertise and advice from an experienced, local broker.Major retail clients have included Lowe’s, Sweetbay Supermarket, Office Depot, Ruby Tuesday, Panera Bread, McDonald’s (Collier County) and Darden Restaurants, to name a few. However, LandQwest agents have the experience to provide comprehensive commercial assistance to all types of local, regional and national tenants, owners, investors, developers and builders.
“All of our retail-centered agents came to us from successful real estate-related careers, either on the brokerage or corporate side, and transferred their experience into third-party brokerage,” said Cunningham. “Having such highly-qualified people in that core part of our business — the retail sector – has allowed us to prosper as we develop the other aspects of our company.”
In addition to retail services and tenant representation, LandQwest’s commercial services include: office, industrial, multi-family and vacant land sales; leasing; land acquisition and disposition; investment sales; market research and consulting; space planning and property management.
Many of LandQwest’s clients require multiple services. Last year for example, LandQwest negotiated Timberstone Group’s $22 million purchase of the former Dragon Plaza/Old America properties on U.S. 41 in Fort Myers. When the Ohio-based developer announced plans to rebuild the 23-acre retail/office complex, now known as Palm Pointe Shoppes, it named LandQwest to lease and manage the property.
Construction of the 260,000sf project is well underway and slated for completion in 2010. LandQwest is negotiating with several nationally-known names, as well as local and regional retailers.
Opportunities in a Changing Market
Mounce and Cunningham agree that the market has become more sophisticated about what constitutes a good real estate deal and more aware that every deal must make financial sense.
“Five years ago, a new agent could get a license, establish a few key relationships and negotiate transactions,” said Mounce. “But in the last couple of years, the market has changed. There’s not the frenzy there was to make a sale at any cost. Clients today demand market knowledge and sound advice.”
Also, now that solo brokers and boutique firms are all but extinct and most mid-sized brokerages have consolidated, just a handful of large, nationally-affiliated companies remain to conduct the bulk of the market’s transactions. As a result, it’s become critically important for brokerages to meet a client’s every commercial need as seamlessly and professionally as possible.
To do so, LandQwest is focusing considerable energy on expanding its two fastest-growing areas.
Property Management
Although it is a stand-alone entity, LandQwest’s property management division is an integral part of the firm’s expansion strategy. Led by company principal Rokki Rogan, and Mary Tardiff, director of asset management, the division works to maintain and improve the value of its clients’ commercial properties.
Services range from monthly financial reporting and payment of operating expenses to collections, lease renewals, maintenance and repairs, emergency response service and annual budget projections, among others.
LandQwest is now actively pursuing new management accounts. “We realize the value of having a property management division, not just for the benefit of our brokerage clients, but for any commercial property owner in Southwest Florida,” said Cunningham.
Efforts to expand the company’s reach should also benefit LandQwest. Besides enabling it to establish new relationships with property owners throughout the market, the enhanced focus on management should also fortify existing relationships on the brokerage side.
Asset Recovery
Until recently, most of LandQwest’s activity with asset recovery was on the consulting side, helping lenders evaluate their options for non-performing debt – typically foreclosing, taking a deed in lieu of, selling the debt or working a deal with the borrower. But increasingly, lenders are making those decisions themselves before turning to LandQwest for assistance with pricing, stabilizing and marketing the asset.
In working with clients, LandQwest may act in the following capacities:
¥ As a consultant to the lender or receiver to stabilize the asset or in some instances, continue rezoning and permitting efforts already underway;
¥ As a management entity to preserve or enhance the value of a property;
¥ As a receiver, accountable to the court and the lender for revenue collected from an income-producing property; or
¥ As a broker for the liquidation.
In addition to lenders, Asset Recovery clients include bankruptcy attorneys and trustees, accountants and investment fund managers. “We have the expertise and complimentary skills that can accommodate the needs of any lender, attorney or owner of a non-performing asset,” said Mounce.
Thus far, the focus of Asset Recovery has been confined mainly to commercial assets. However, the company recently started accepting limited assignments on residential properties, such as condominium projects.
Also, its experience in purchasing debt has put LandQwest on the radar of investment funds. “Sometimes we can link a bank’s goal (to either liquidate the debt or the real estate) with an investment fund’s objective (to find new revenue-producing avenues).”
Focusing on Fundamentals
In-depth market knowledge and prudent budgeting have helped LandQwest remain up in a down market. The collective experience of LandQwest’s principals is another plus.
Between0them, Mounce, Cunningham and Rogan have spent more than 60 years working in commercial real estate, the majority of it in Southwest Florida. Because they understand the cyclical nature of the market, they create an annual budget based on projected revenue and expenses – and they stick to it.
“Just because your top line expands, you can’t deviate from the budget and take assignments that ultimately, are going to cost you. You can’t do that in this market and hope to stay in business,” said Cunningham. “We take quality assignments and work with sellers and buyers, and landlords and tenants who are realistic about their price points and are honest about what they need to achieve their goals.”
As it expands, LandQwest is taking the same no-nonsense approach to adding agents, hiring only those who are qualified to enhance the company’s book of business. “We’re looking for agents who either have direct commercial experience on the corporate or brokerage side, or who can be trained into the sales and leasing sectors.”
Cunningham adds that positive, net population growth will turn the marketplace around, locally and statewide, “but how long it’s going to take is anybody’s guess. At least the mentality that somehow Lee County is different from the rest of the investment world seems to be gone. I think our market will succeed as people realize that real estate is just one form of investment and base their decisions on verifiable market evidence and reasonable expectations.”
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