Padilla Details NorthMarq’s Investment Sales Strategy

As economic uncertainty and consolidation create challenges for investment sales nationwide, NorthMarq Capital Inc. is quietly laying the groundwork to expand beyond its long-time capital markets business and become a major investment sales player. This year, NorthMarq will open as many as three dedicated investment sales offices, company CEO Edward Padilla told CPN exclusively today. By the end of January, NorthMarq plans to reveal the location of one of those offices. All told, NorthMarq could end 2008 with investment sales offices in California, Texas, Washington, D.C., and the Minneapolis area, where NorthMarq’s corporate headquarters is located. Padilla (pictured) detailed NorthMarq’s strategy for the first time since the firm enlisted Cushman & Wakefield Inc. veteran Chip Ryan to start an investment brokerage practice for NorthMarq in Washington D.C. The first offices would serve as the vanguard for a national network that could encompass 10 locations over the next five years. “We’re fairly confident that we can become a national firm working out of 10 key markets,” Padilla explained. In the long term, NorthMarq expects its investment sales practice to compete with those of industry leaders like CB Richard Ellis Group Inc. and Holliday Fenoglio Fowler L.P., two of NorthMarq’s top capital markets rivals. Padilla also named Cushman & Wakefield Inc. and Eastdil Secured as examples of other investment sales leaders NorthMarq views as its competition. NorthMarq’s preferred strategy will be to grow its investment advisory business primarily through acquisition. The likely slowdown in investment sales nationwide, combined with consolidation, makes it increasingly difficult for smaller to mid-size firms to compete with industry giants, making acquisition an attractive strategy for those firms, Padilla said. NorthMarq’s plans to play in the investment brokerage arena would add a new dimension to the firm’s banking business, which NorthMarq has built into a $36 billion portfolio. The firm’s focus on capital markets will help distinguish NorthMarq as it develops its investment advisory practice, Padilla argued. Because NorthMarq does not offer services in property management or other non-financial business areas, the firm will avoid potential conflicts that might arise when a prospective client is already receiving services from another group within the company.