THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, February 23, 1995 TAG: 9502230287
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MYLENE MANGALINDAN, STAFF WRITER
LENGTH: Medium: 70 lines
F. Craig Read, chairman and CEO of Read Commercial Properties Inc., recognized two years ago that for his 14-year-old company to expand, it would have to grow internally or join another real estate firm.
So he started shopping around for prospective partners.
Last Thursday his quest ended when he cemented a deal to merge his Hampton-based company with Robinson & Wetmore Inc., a Norfolk commercial real estate firm with roots in development.
Robinson & Wetmore's acquisition of Read Commercial - for an undisclosed amount - gives it a substantial Peninsula presence in addition to its Southside headquarters and Richmond office. The merger creates a firm that will lease and manage more than 5 million square feet. It employs 83 people: 20 in Richmond, 33 in Norfolk and 30 in Hampton.
``The natural trend is for everyone to merge,'' said Read, who becomes a senior vice president at Robinson & Wetmore. ``There are a lot of advantages to do that. We either had to grow big or merge in order to compete.''
Commercial real estate firms realize that economies of scale can cut administrative costs and benefit clients who want one company familiar with its operations to handle all its transactions. It relieves pressure put on firms without substantial resources that are forced to expand their operations.
Geographic expansion will serve Robinson & Wetmore's customers better, said Anthony W. Smith, a senior vice president, who started negotiating the merger last summer.
His company follows in the footsteps of other local firms expanding their operations. Goodman Segar Hogan Hoffler merged with Richmond-based Virginia Realty and Development Co. last year, as did Morton G. Thalhimer Inc. Realtors in Richmond with Thornton & Co. in Norfolk.
Richmond and Hampton Roads are closely intertwined, which explains the number of transactions between the two markets, Smith said.
``They're recognizing the importance to their customers of being in both markets,'' Smith said. ``But we've been there already.''
Robinson & Wetmore's Richmond office opened simultaneously with its Norfolk headquarters in 1983.
Read had been approached about possible mergers by other firms, including Goodman Segar Hogan Hoffler and Harvey Lindsay Commercial Real Estate.
``As all the big guys started to expand, we were the natural choice,'' he said.
A traditional brokerage firm, Read Commercial controls most of the commercial real estate market on the Peninsula - about 35 percent, Read said. Last year, Read Commercial handled about $50 million in sales and about 190 leases.
Robinson & Wetmore did not disclose its revenue or sales figures for 1994 except to say it completed its fourth consecutive revenue increase, Smith said.
Both Robinson & Wetmore and Read's clients are mostly institutional investors, like pension funds, financial advisory groups and life insurance companies. Those investors own the office buildings, shopping centers and other commercial properties managed by Robinson & Wetmore. ILLUSTRATION: A SIGN OF THE TIMES
TAMARA VONINSKI/Staff
F. Craig Read, left, and Anthony w. Smith, senior vice presidents at
Robinson & Wetmore. "The natural trend is for everyone to merge,"
said Read, who has been chairman and CEO of Rand Commercial
Properties Inc. "We either had to grow big or merge in order to
compete."
by CNB