VOL. 124 | NO. 18 | Wednesday, January 28, 2009
Keller Williams Set to Expand in Memphis
By Eric Smith
“We’re not interested at all in residential agents trying to sell commercial. We’re more interested in establishing a genuine commercial division based on our core beliefs and values.”
– Steve Young
Local Keller Williams team leader
At a time when real estate companies everywhere are closing offices and agents are abandoning the profession, Keller Williams Realty is expanding.
The Austin, Texas-based company has enhanced its Memphis presence by adding commercial brokerage to its array of services, part of a continuing, nationwide launch by Keller Williams to move beyond the residential sector.
The formal name of the company’s commercial real estate division is KW Commercial, which was created in the company’s hometown of Austin last summer with affiliate branches scheduled to open in stages.
Sam Mitchell, formerly of McCullar Ferguson Realty LLC, has been hired as director of Memphis’ first KW Commercial branch, a charge he views as “exciting and challenging at the same time.”
“Most people know Keller Williams on the residential side,” Mitchell said. “There was a lot of interest on the residential side (to open a commercial office) because it gives Keller Williams another opportunity for referring leads and becoming a full-service company. I think that’s the catalyst for it.”
Against the grain
The company will offer investment brokerage, as well as tenant and landlord representation, but its debut will be greeted by a difficult market in which commercial sales are down almost 30 percent.
Shelby County saw just 848 commercial transactions in 2008, down from 1,166 sales in 2007, according to the latest data from real estate information company Chandler Reports, www.chandlerreports.com.
And the average sales amount last year was $944,235, down 48 percent from $1.8 million in 2007, while the total sales figure in terms of dollar amount was $800.7 million, down 62 percent from $2.12 billion in 2007.
That means a smaller piece of the pie for all brokers, but Mitchell said it’s not a bad time to begin a business because the lower volume allows professionals to focus on fundamentals like education, pursuing leads and establishing a book of business.
Besides, KW Commercial will be housed in the Keller Williams residential office on Forest Hill-Irene Road, reducing the company’s overhead of adding this division and personnel.
“I don’t think at the local level that there’s much of a capital investment to start something like this,” Mitchell said.
Respect must be earned
Keller Williams Realty entered the Memphis market in 2005, with the Forest Hill-Irene office opening in 2006. Steve Young serves as team leader for that branch, and he said Keller Williams wanted to establish a residential base in this market “to prove our merit” before launching into the commercial realm.
“We’re not interested at all in residential agents trying to sell commercial,” Young said. “We’re more interested in establishing a genuine commercial division based on our core beliefs and values.”
Gloria Sivori, operations manager for KW Commercial in Austin, said the company decided to launch the KW Commercial division because many of its residential agents were losing commercial leads to competitors when they could have kept them in house.
The company’s leaders realized their residential agents could be a “great tool for a commercial division,” Sivori said, so Keller Williams recruited veteran commercial real estate broker Buddy Norman to start the company in 2008.
Although KW Commercial held a soft launch last summer – followed by branch openings across the country ever since – the formal kickoff of the brand will be held at the company’s annual convention, called “Family Reunion,” slated for February.
“This is when the KW Commercial division will be fully launched nationwide,” Sivori said.
Windows of opportunity
But the local office is open and ready for business, said Mitchell, who is in the midst of a second career. He sold E.C. Blackstone Co. in 1998 and two years later broke into the commercial real estate business at Crye-Leike Commercial. He also worked for Trezevant Realty Corp. before joining McCullar Ferguson.
Mitchell said he primarily worked on the retail sector in his previous commercial stints, so he now looks forward to expanding his repertoire with KW Commercial.
“I’m hoping this will give me the opportunity to do a little more industrial and more broad-based transactions,” Mitchell said.
Young touted Mitchell’s background in business as well as commercial real estate as reasons he should be successful in this venture, something that will be especially needed in a down market.
“If he sat down with a business owner that was looking to lease or buy property, he can relate to where that guy is coming from from a profit and loss standpoint and understand products, and so forth,” Young said. “A lot of folks that are just true ‘salespeople’ don’t have that background.”
Chandler Reports is a division of The Daily News Publishing Co.