Retail Expansion From the Mall Up0 Comment
Aggressive company expansions typically come through organic growth or accretive acquisitions. For JLL Retail, the company’s path to forming a competitive national brokerage business began with a new outlook at the local mall level.
“We changed how we viewed the growth of our retail business during strategy session several years ago,” Greg Maloney, the chief executive officer of JLL’s retail division. JLL’s executives knew that they had well-established cross-border businesses in office, industrial and hotels, but one area that was not as well integrated was retail. “At the time our U.S. retail division had a strong nationally-based mall platform, but we didn’t have the strong local market expertise to help retailers find the right locations. It was that gap in our services we set out to fix,” Maloney added.
Timing is everything
JLL’s march started quickly with the expansion of its legacy mall management platform to include open air centers. Then, it grew from that foundation to cultivate their landlord and tenant brokerage platform. The timing proved prodigious, as the need for outsourced mall management services began to slow down during the recession, largely due to an increase in the number of self-performing REITs that bought up enclosed malls, and the pull-back in retail development.
“We found that the real opportunity for our management platform was in the open air division. Compared to enclosed malls, only about 15% of open-air centers are owned by REITs, so there was a greater demand for real estate services in that product type,” added Maloney.
In 2010, JLL acquired the management and leasing responsibilities for the properties in GGP’s third-party management division, catapulting JLL to the largest U.S. third-party retail management firm.
Performance begins with People
To kick start the firm’s local markets expansion, it took the right talent and teamwork across the globe. JLL hired industry veteran Steve Yenser in 2010 as National Retail Brokerage Lead for JLL, in order to better understand and meet client’s demands for tenant representation and leasing services. The firm tasked him with growing the retail brokerage platform, “We wanted to be as well-known by retail occupiers, as we already were by owners. But you can’t service retailers from afar, you have to be local and we need the top brokers in the industry to fill our ranks,” added Yenser.
“The real crux of growing brokerage was getting local brokerage professionals on the ground in targeted markets. Local market knowledge lies within the local brokers,” Yenser tells GlobeSt.com.
In January 2012, he began bringing on brokerage professionals in markets across the U.S. JLL’s retail group now has about 80 brokerage professionals in 20 core retail markets. Typically, JLL expands in a market by first looking to acquire a local firm with deep roots, or an individual considered a leader in their market, leaving it up to that person to assemble a team. “We’ve added team’s in all different ways in order to empower and support our new colleagues. For us, our people are our most important asset, and getting the right teams in place with the right resources are paramount to our growth.” added Maloney.
“It’s been an eye-opening experience to see how many talented brokers are hungry for an opportunity to join a global platform and take their service and business to the next level,” says Maloney, “As one broad team, connected around the globe, we are better able to execute on behalf of our occupier and owner clients.” Global expansion doesn’t come without growing pains, and Maloney admits that everyone on this team has put a lot of “elbow grease” into expanding this business from a third-party management group to a full service firm. And, the industry sea changes aren’t done yet.
“We’re going to continue expanding, and although we are focused on the core markets, we don’t want to miss an opportunity to find the right people,” Maloney adds. “We will be successful if we stick to that basic principle. We don’t necessarily want to be the biggest; however, in the markets we choose to put retail professionals we want to be the very best.” His aim is for the firm to establish itself in about 30 markets with 200+ brokers by 2020.