JOSEPH SCIOLLA Cresa Partners
If the rumored merger of Staubach Co. and Jones Lang LaSalle is completed this week, one question looms: What happens when a company that exclusively represents tenants joins a global firm that advises both tenants and property owners?
“You can’t erect a Chinese wall where one broker represents a landlord and the other advises a tenant under one roof,” said Joseph Sciolla, managing principal at Cresa-Partners, an international commercial real estate advisory firm with a Boston office that only represents tenants. “It’s no different than a law firm representing the plaintiff and the defendant in the same trial. It doesn’t work.”
Last month, the Dallas Morning News reported that Staubach Co., one of the country’s largest independent real estate brokerage firms that represent tenants is in merger talks with JLL, the global real estate firm that has operations in 700 locations in 60 countries.
Founded by former Dallas Cowboys quarterback Roger Staubach, the company has more than 70 offices throughout North America, with about 1,600 employees. The firm represents more than 3,000 tenants, and has touted its major focus as “exclusive tenant representation for companies seeking office and industrial commercial space.”
JLL represents landlords and tenants.
Lisa M. Campoli, executive vice president at Colliers Meredith & Grew, said the merger raises questions about how Staubach would handle their claim about tenant-only representation.
“It’s an issue both will have to deal with,” she said. “They might try to segregate the practice, saying they still have the capability to represent tenants only. They might suggest that there is somehow a wall, and that Staubach brings an expertise that is important to the business operation. But if representing tenants exclusively has been the centerpiece of your marketing message, the pitch becomes diluted once you join an organization that offers a much broader business line.”
William McCall, president of McCall & Almy, another Boston tenant rep firm, said perhaps Staubach and JLL can pull it off, but he has doubts.
“Barack and Hillary appear headed for a merger, so why not these two companies?” he said. “But one of the arguments we sell, and Staubach always sold, is that you look tenants in the eye and say, ‘You will never see us on the other side of the table.’ If JLL is the exclusive agent for a property and Staubach has a prospective tenant, there’s a potential for conflict.”
But one JLL broker insists that real estate firms that do it right can represent tenants and landlords. At the end of the day, the source said, you have to rely on the character, integrity and ethics of the broker that is representing you.
“As long as you are upfront, fair with clients and make the disclosures, it can be done,” the source said. “We represent lots of landlords and tenants. Very few of the tenants I represent go into our buildings because it’s about what’s right for the client, whether it’s too expensive, wrong configuration, wrong image, whatever it is. You have to do the right thing for your client. If not, you will be out of a job very quickly. Clients are smart enough to see if there is steering going on.”
