Trying to find a niche in Baltimore

July 09, 1995|By Kevin L. McQuaid | Kevin L. McQuaid,Sun Staff Writer

If any company should be buoyed by the nationwide resurgence of the commercial real estate and recent industry trends, it is CB Commercial Real Estate Group Inc.

The nation's largest real estate firm, with 78 offices and revenues last year of $430 million, is benefiting from industry consolidation, its vast network of agents and a variety of services, technological investments and institutional relationships extending well beyond its home base of Los Angeles.

But in Baltimore, CB Commercial continues to suffer the residual effects of an identity crisis that dates to 1983, when the company established a local office and attempted to crack the city's tightly woven real estate community.

"When CB came to town, it had no local management and hired young, energetic but largely untrained people," said Richard P. Manekin, who in May became a CB senior vice president and managing partner of the 26-agent Baltimore office. "Needless to say, CB wasn't taken seriously."

With Mr. Manekin, 49, whose family has played a significant role in the Baltimore real estate community since World War II, CB Commercial hopes finally to gain the same respect locally that it has achieved nationally.

Mr. Manekin left Manekin Corp., the regional development and brokerage firm founded by his father and uncle, to join CB Commercial in January, citing the national company's ability to compete effectively in the fast-changing world of commercial real estate.

"Corporations and institutions that own or lease real estate are looking to limit the number of vendors they use on a national basis," said Mr. Manekin, the third local CB Commercial leader in the office's 13-year history. "As a result, local and even regional firms, particularly those not affiliated with a national network, are limited in their ability to obtain that type of business, and that's the future."

For the present, however, CB Commercial faces stiff competition in Baltimore from Colliers Pinkard, KLNB Inc. and Casey & Associates Inc., firms that have either better established themselves or carved out market niches. Even Mr. Manekin acknowledges that Pinkard is currently the market leader in terms of providing a full range of real estate services here.

CB Commercial intends to surpass the local competition by beefing up its property management, industrial, retail and other divisions, and by hiring experienced agents with both market knowledge and existing clients.

Since the start of the year, for instance, CB Commercial's hiring in Baltimore includes Mr. Manekin and veteran brokers John Wilhide, William M. Pellington and Guy Phelan, among others. The company also is attempting to better integrate top regional producers intoBaltimore.

"Dick Manekin is a leader with a great deal of maturity within a rapidly developing professional sales force," said Christopher R. Ludeman, a CB Commercial executivevice president and regional manager for Baltimore and Washington. "Dick personifies a person with both technical expertise and youthful drive."

More than respect or identity in Baltimore is at stake, however.

CB Commercial's local push coincides with a longer-term goal to take the privately held company public in order to retire debt and re-capitalize, sources said.

David A. Davidson, CB Commercial's chief financial officer, has saidthat while going public is an option, it is not one CB Commercial would immediately consider. But current and former agents say going public by the end of 1997 is an "openly stated goal" within CB Commercial, and that the current push is an effort to brighten its balance sheet and provide prospective investors with a financially successful history.

CB Commercial's large debt level -- estimated at roughly $160 million -- resulted from a 1989 leveraged buyout from Sears, Roebuck & Co., when company managers teamed upwith Japanese and domestic investors, including Westinghouse Financial Services and the Mellon Family Trust.

Although industry analysts have pointed to the debt level as a principal stumbling block to growth, the company noted earlier this year that it has recast and extended much of it. The debt had been set to mature in 1999 and 2000.

Regardless of its corporate structure, CB Commercial's goal remains the same: To become the "pre-eminent diversified commercial real estate services firm in the world," according to James J. Didion, the company's chairman.

To meet that goal, CB Commercial has been diversifying and expanding the service-oriented aspects of its business both nationally and locally, including appraisal work, research capabilities and institutional representation.

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