It has been known primarily as an office and industrial firm, but these days, Spaulding & Slye Colliers is going wholesale into retail.

Hoping to gain leverage off its veteran retail investment sales group, the Boston-based real estate company is adding retail leasing to its cadre of professional services and is aggressively stepping up its third-party property management business for shopping malls and other stores. With the recent addition of broker Ben Starr to the company, Spaulding & Slye can now offer one-stop shopping to developers, investors and tenants, according to principal Richard W. Reynolds.

“It’s the third leg of the stool,” said Reynolds, who will serve as a conduit between the Retail Services Group and the parent company. “We just felt that if we are going to be managing and handling the transfer of [retail properties], we also ought to have the capability to market and lease them … It’s just a natural fit.”

Spaulding & Slye is not the first real estate firm to attempt a foray into retail, with previous efforts experiencing varying success. Whereas Meredith & Grew last year began its own retail leasing division after historically eschewing that sector, Hunneman Commercial Co. last month disbanded its group when several of its top producers departed. Other firms have alternatively tried – and failed – to establish themselves in the field as well.

Reynolds acknowledged that breaking into retail can be a tricky proposition, especially with such players as Finard & Co., Atlantic Retail and the Triad Group already well-established in the region. Downtown Boston features its own specialists in Schaffer & Assoc. and the Dartmouth Co., while there are also a number of retail brokers who operate independently. But Reynolds maintains that Spaulding & Slye has a better chance of making the effort work because it is not starting from scratch.

Indeed, Vice Presidents James Koury and Geoff Millerd have focused on selling retail properties since joining Spaulding & Slye in 1996. Operating as a separate arm of the firm’s Capital Markets Group, the pair has handled the sale of 60 retail centers encompassing 5.5 million square feet of space during that time, winning the Greater Boston Real Estate Board’s top retail sales award for each of the past three years. One of those deals, the 1998 sale of the 600,000-square-foot Westgate Mall in Brockton, was the largest enclosed shopping center ever brokered by a local real estate company, according to Koury.

“They are, in my view, the leaders in New England [for retail sales],” Reynolds said of Koury and Millerd. “That’s all they do, and they clearly do it very well.”

Different Animal
Koury said he believes it is important to focus on retail because it is a different animal than office, industrial or other commercial property types. The structuring of leases, physical layout and tenant issues require a unique understanding that cannot be culled from the broader investment perspective, he said.

“Most other firms do [retail] as a sideline, but we think it’s important to specialize as opposed to generalizing,” Koury said. “It’s one of the things that really sets us apart.”

Despite the solid track record, Koury said he believes Spaulding & Slye’s expansion of its other retail services will further assist in the investment activity. A client, for example, might be in a better position to sell a shopping center if it is leased up in advance, he said, garnering a higher price and a smoother process. Brokers are also able to keep their ears to the ground to identify additional opportunities, said Koury, who said the arrival of Starr and other leasing brokers “completes the circle.”

“We can literally finance, develop, lease, manage and sell it all under one roof,” he said. “It’s an exciting story.”

On the flip side, Starr said he believes the existing services will provide an edge for getting the leasing program underway. “The pillars were in place,” he said, adding that it also exemplifies the firm’s commitment to becoming a leading player in retail.

“Spaulding & Slye waited a long time to make this move because they wanted to do it right,” said Starr. “They didn’t want to just add a body to their brokerage [division] and call it their retail group.”

A Framingham native, Starr spent the past seven years at an independent firm in Philadelphia, working with such clients as Staples, Starbucks and Old Navy. Besides wanting to return to the Bay State, Starr said he was also impressed by Spaulding & Slye’s understanding of retail as a largely entrepreneurial business, one requiring brokers to move quickly to identify and respond to new trends and concepts. Geographically, the company will focus on all aspects of the business, he said, from rural Maine to downtown Boston.

“It’s important that we are able to cover all of New England because your clients want that,” he said. The new group’s first two deals, for example, are a pair of shopping center leases in Connecticut.

As part of its game plan, Spaulding & Slye has added Mary Powers, a specialist in representing landlords, to the leasing team. Reynolds said additional hires are in the works, with announcements anticipated over the near term.

In the meantime, the third-party property management aspect is also in a growth mode. Headed up by Vice President Stephen B. McDonald, the retail management team is about to be hired to manage more than one million square feet of additional retail space, bolstering its current inventory of just under three million square feet. About 1.3 million square feet of the existing portfolio is via a strategic alliance with Great Island Development, a Boston limited partnership that owns retail property throughout New England. Spaulding & Slye provides both leasing and management services to that firm.

Reynolds seconded Starr’s notion that Spaulding & Slye’s approach to retail is another plus. But while it will operate as a separate division, Reynolds pledged that the group will not be “an orphan” to the rest of the firm. He will act as principal in charge to ensure that retail clients benefit from the company’s other disciplines, such as its construction group and permitting services.

“Retail has to be looked at as its own sector, but we also recognize the need for a connection with the rest of the company,” said Reynolds, who will also aid the retail staff in such things as creating business plans, preparing budgets and hiring new people. Overall, he predicted that Spaulding & Slye will succeed in the retail arena, citing the veteran leadership of Starr, Koury and McDonald, and the commitment of the company to the product type.

“We’re going to move this thing forward very quickly,” Reynolds said.