The C&W Alliance: Is Six-Market Pact, Including Former Offices, Harbinger of Trend?

Week of February 11, 2002
Snapshot from the Field

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The C&W Alliance:

"The Alliance firms will consist of best-of-class independent companies, including former C&W-owned offices, with which we have had a history of successful partnership in these markets," C&W U.S. President of Operations Bruce Mosler explained.

Is Six-Market Pact,
Including Former Offices,
Harbinger of Trend?

By JACK LYNE, Site Selection Executive Editor of Interactive Publishing

NEW YORK CITY -- In what could prove to be the harbinger of an industry trend, Cushman & Wakefield (C&W) has announced a major new initiative, the Cushman & Wakefield Alliance. The newly minted network of independent real estate firms spanning six U.S. markets will bear the brand of C&W-allied companies.
The new enterprise, company officials explained, is designed to increase C&W's market share while expanding service distribution channels for clients in what the company called "strategic U.S. markets."
The half dozen markets that the first-phase C&W Alliance covers span a broad geographic range of the U.S. market. The alliance partners' operations encompass parts of Alabama, Arkansas, California, Florida, Mississippi, North Carolina, South Carolina and Tennessee.
The first group of firms picked for the C&W Alliance are located "in industrial-transaction dominated regions," according to the company's official statement on the new initiative. Perhaps more significantly, the first phase of the C&W Alliance includes offices that C&W previously owned. The opening salvo of C&W's initiative also includes offices that were onetime C&W preferred providers.
"The Alliance firms will consist of best-of-class independent companies, including former C&W-owned offices, with which we have had a history of successful partnership in these markets," C&W U.S. President of Operations Bruce Mosler explained. "All firms will be contracted and branded with C&W as a 'Member of the Cushman & Wakefield Alliance'."
Derrick Mashore, head of C&W's Client Strategies, will manage the C&W Alliance, Mosler said.

Alliance Head: Pact Enhances
'Span Of Control and Continuum'

C&W's new alliance partnerships are expected to trigger a number of benefits, company officials explained.
Among those anticipated payoffs are the creation of new channels for C&W's advisory, asset, corporate and international services, as well as its strategic ventures business. In addition, the six partnerships will provide clients in non-C&W markets with "the scale and scope of C&W expertise," including the company's research, consultation, marketing and technology groups, according to C&W officials.
"The Alliance enhances C&W's span of control and continuum of broad, quality services for our clients in these markets," Mashore said. "At the same time, they allow C&W more effective access through quality local real estate firms and former offices that benefit from using our multiple services."
The first six firms tapped for the Cushman & Wakefield Alliance include:

Commercial Carolina (with a service area that includes Raleigh/Durham, Charlotte and Greensboro/Winston-Salem, N.C.; Charleston, Columbia and Greenville/Spartanburg, S. C.), -- a former C&W office.
Commercial Jacksonville (Fla.), a former C&W office.
Corporate Real Estate Advisors (San Diego), a former C&W office.
Commercial Tennessee (Memphis, Tenn.; Little Rock, Ark., and parts of Mississippi), a former C&W preferred provider in the region.
Eason, Graham & Sandner (Birmingham and Huntsville, Ala.), a former C&W preferred provider in the region, and
Mission Property (Nashville, Tenn.), a former C&W preferred provider in the region.

downtown Nashville
Nashville, Tenn., (pictured above) is one of the markets represented in the first phase of the Cushman & Wakefield Alliance. Other states encompassed by the six-market initiative include parts of Alabama, Arkansas, California, Florida, Mississippi, North Carolina and South Carolina.

Will C&W's Contemporaries Follow Suit?

What template may be laid down here is harder to specify.
At least the case of Commercial Jacksonville, however, C&W sold its operation to several local brokers, reported The Business Journal of Jacksonville (BJJ).
Local control offers its own compelling logic. So, too, does using affiliations, rather than company-owned branches, to establish operations in second-tier markets, said Larry Richey, C&W's managing director for Florida.
"Frankly, it makes the most sense because of our desire to expand and formalize relationships in areas where we don't have an official office," Richey told BJJ.
The larger question here may be, how sensible is C&W's logic? Pretty sensible, say some industry observers, who expect other real estate service providers to follow suit. Opting for the affiliate route, they say, offers a lower-cost, lower-risk strategy for entering new or heretofore sluggish markets.
That argument's validity, of course, remains to be seen. And so, too, does how fast the C&W Alliance expands.
C&W is in no rush to enlarge the range of the partnership, Mosler has said. Richey, on the other hand, said that the Cushman & Wakefield Alliance hopes to expand into 20 new markets. As for C&W, the 1917-founded operation will surely employ its well-honed market instincts in finding the proper pace needed to extend its new initiative.
The broader questions here stirred by the formation of the Cushman & Wakefield Alliance may, in the long run, prove to be more intriguing:
Will C&W's contemporaries, for instance, emulate its alliance strategy?
If so, when - and where?
And if so, how?

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