The chatter in many commercial real estate quarters is decidedly downbeat these days, but the vortex hasn't sucked in Larry Starr.
Instead, Starr, a Longboat Key-based entrepreneur who founded a multimillion-dollar resort properties firm in the 1980s, has bet big on a market resurgence.
“The market is bad if you continue to be overpriced,” says Starr. “Unless you have buyers and sellers who are willing to be realistic, then you will say the market is bad.”
Starr, backing up the theory, recently bought the local franchise rights for a Sperry Van Ness commercial real estate office in Manatee, Charlotte and Sarasota counties. The office, Sperry Van Ness Commercial Advisory Group, is now one of the largest nationally branded commercial realty firms in the Sarasota-Manatee region. There are 23 SVN offices in Florida, including one each in Tampa, St. Petersburg, Fort Myers and Naples.
Starr bought the SVN franchise in July, and the move has begun to pay off. The firm, partially through broker Michael Gallatin, has since closed $35 million in sales of bank-owned properties. The firm projects it will handle $50 million in overall sales this year, and seeks to grow that figure by at least 40% in 2012, says SVN Managing Director Tony Veldkamp.
A broker with Sarasota-based Michael Saunders & Co. for 12 years, Veldkamp, who joined SVN in September, has spotted two developing trends in his short time at the firm. For one, a bulk of SVN's clients are doing deals on an all-cash basis — a development other Gulf Coast commercial real estate brokers have also tracked.
The second trend is that short of multifamily and health care, the hot sector changes rapidly, and seemingly randomly. “We are seeing some bright spots,” says Veldkamp, “but it's property specific and location specific.”
Starr, meanwhile, declines to comment on how much he spent for the three-county SVN franchise, though he calls it a “substantial and ongoing investment.”
The risk is further intensified because Starr has moved boldly with the franchise, past what he paid to buy it. He already hired 11 brokers, including five since Veldkamp joined last month. He also seeks to hire four more agents in the next few months.
“We really want to pick the best of the best,” says Starr. “We aren't looking for quantity. We're looking for quality and specialization.”
The franchise currently operates out of an office in the Regions Bank building in downtown Sarasota. It plans to open two more offices, one on U.S 41 in Sarasota and another in downtown Bradenton, by next year.
Veldkamp says Sperry Van Ness' biggest competitive advantage is the ability to quickly access more than 800 agents and experts nationwide who can help facilitate deals. Those agents can connect Veldkamp and his team with potential buyers in Utah, for example, or institutional investors from New York. “It allows us to cast a wider net,” says Veldkamp.
And just like Starr, Irvine, Calif.-based Sperry Van Ness, founded in 1987 and now in 38 states and three countries, is in the midst of an aggressive expansion.
The Sarasota SVN office, in fact, is one of nine franchises the parent company sold this year. Others vary in location from California to Colorado and New York to Tennessee. SVN corporate officials hope to add six more franchise units by the end of the year.
Still, more agents and office space, combined with a think-big growth strategy and an optimistic attitude, can't totally compensate for the overall shortage of deals in the market. Starr and Veldkamp realize that, and they plan to combat it through the national reach of Sperry Van Ness and the knowledge of its local brokers.
“There are properties out there at the right price and there are some organizations with the money to buy,” says Starr. “The trick is to get the two groups together.”