KLNB real estate aims to be a regional power Generations: As KLNB moves into its second generation of partners, it's becoming the region's premier real estate services company. Ask Wal-Mart.

November 24, 1996|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

With the setting sun filtering through the lobby of a Towson office building the last week of October, Bob Levin bid goodbye to colleagues, friends and the company he helped build for the past three decades.

There were a few pats on the back, the customary cake, a humorous poem about his career and cocktails.

But for KLNB Inc., the commercial real estate firm specializing in retail and industrial brokerage and management that Levin co-founded in 1968, the party represented more than an appreciation of a lengthy career -- Levin's retirement officially marks the ascension of its second generation of leaders.

But as the 68-year-old Levin -- the last of four partners whose initials made up the firm's name -- exits from the day-to-day operations, the future of the company seems bright in the hands of 16 partners.

That future is best illustrated by the recent past. In the last five years, KLNB's annual transactional volume -- the total dollars of sales and leases in which the firm has participated -- has more than tripled, to $511 million in 1995, despite several years in which the market as a whole slumped.

This year, the Towson-based company expects to top $600 million, maintaining its ranking as the region's largest real estate services firm.

"We've become more fully integrated as a company," said Robert Z. Smith Jr., a KLNB principal and head of its Columbia office. "We balance and counter-balance each other more now than we used to, and we're growing geographically and widening our level of services. It's what our clients want and demand."

And more expansion is planned. Although the closely held firm declines to reveal specifics -- or its profits -- its partners say that a plan is under way to eclipse this year's results by more than 20 percent in 1997.

At least one element includes opening an office in Northern Virginia early next year, sources say, making KLNB the first independent Baltimore-area commercial real estate brokerage house to march into the Old Dominion.

There, KLNB will face competitive challenges from national real estate companies and well-entrenched regional brokerages, which it hopes to counter through relationships with a host of key retailers and real estate expertise.

Over time, the firm hopes to create a beachhead from Charlotte, N.C., to Philadelphia, providing brokerage and property management with Constellation Real Estate Group Inc.

"To go to the next level, we knew we had to add certain management capabilities that would have required borrowing money. Constellation gave us that ability without any cost to us," said Thomas C. Martel, KLNB's president and another of the firm's principals.

KLNB and Constellation, a Baltimore Gas and Electric Co. subsidiary, teamed up in April, and together now manage more than 12 million square feet, roughly equivalent to all the office space downtown.

The first step in its expansion plan has already taken place: Just weeks ago, KLNB tripled the size of its Calverton office serving Washington and surrounding counties.

The infrastructure to accommodate the growth has been in place for some time, though. Since 1993, KLNB has plowed more than $500,000 from its earnings into new computers and other technology, Martel said.

In many clients' minds, the investment has more than paid off.

"Their knowledge and access to the market is unparalleled in the Baltimore-Washington area," said Carl Freedman, vice president

of Freedman & Co. Real Estate Inc., a New Jersey shopping center owner that hired KLNB to procure tenants for a $90 million make-over of Parole Plaza in Anne Arundel County.

"They have great depth, and they can get the best tenants," Freedman said. "From a developer's point of view, that's what you want from your leasing agents."

Part of the formula for the firm's success is its size and ubiquity: KLNB operates from Washington to Cecil counties, and in the Baltimore area, its red and white signs blanket shopping centers, warehouses and industrial parks.

That sense of domination alone has landed several clients. For example, when McCormick & Co. Inc. began looking for sites for a new $20 million distribution center, the spice maker chose KLNB for a simple reason: It was one of the few companies capable of providing market research on 50 locations from York, Pa., to Harford County, said Alan Wilson, a former McCormick vice president of corporate procurements.

Perhaps most notably, though, KLNB's market prowess is best depicted by its relationship with Wal-Mart Stores Inc., which tapped it to analyze land and provide detailed research -- down to the length of runways at airports -- when the nation's largest retailer stormed into Maryland to select sites for 35 stores.

"Wal-Mart is hard on brokers," said Mike Davis, an East Coast real estate manager for the Bentonville, Ark.-based chain. "We want to know everything. And we expect our brokers to have the best interests of the company at heart, rather than just be there to sell us a piece of land.

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