February Issue: Race to the Top
- Feb 27, 2015
Joe Stettinius likes to think big. Just five years ago, he was running Cassidy & Pinkard Colliers, a local service firm in Washington, D.C. By last Dec. 31, when DTZ Group wrapped up its acquisition of Cassidy Turley—a direct descendant of Stettinius’ old company—he was overseeing some 4,000 professionals in 60-plus offices who manage more than 400 million square feet and completed $25.8 billion worth of transactions in 2013.
With his new title, chief executive of DTZ’s Americas region, Stettinius is assuming a major role in the firm’s plan to vie for leadership in global real estate services. Practically overnight, the marriage of DTZ and Cassidy Turley created a company with more than 28,000 employees and $2.9 billion in combined revenue.
“What he’s accomplished is nothing short of amazing,” said Linda Rabbit, chairman & CEO of Rand Construction Corp., a Washington, D.C.-based general contractor. Rabbit, who has known Stettinius since he was a leasing agent for Trammell Crow Co. two decades ago, cites his efforts in “making a national platform out of a local boutique, and doing it in a very short time.” A co-founder of Cassidy Turley, Stettinius served as its first president from March 2010 to 2013, when he succeeded the firm’s first CEO, Mark Burkhart.
By joining forces with Cassidy Turley, DTZ vaults into the rarified circle of global service companies occupied by such firms as CBRE Group Inc., which recorded $7.2 billion in revenue for 2013; JLL, which posted nearly $4.6 billion in earnings; and Cushman & Wakefield Inc., which reported $2.5 billion. The deal weds Cassidy Turley to a firm with a strong presence in Europe and Asia; DTZ claims the top spot for investment sales in China, with a market share exceeding 50 percent, and is ranked third in the category in London and the United Kingdom.
DTZ’s acquisition of Cassidy Turley was the most recent in a series of epic deals that have reshaped the real estate services sector over the past decade, including JLL’s acquisition of The Staubach Co. in 2008, CBRE Group Inc.’s 2007 deal for Trammell Crow Co., and, most recently, last year’s purchase of Studley by Savills plc. Tod Lickerman continues to serve as DTZ’s global CEO, while the creation of the new DTZ brought in another noted industry leader: Brett White, who retired as CEO of CBRE Group Inc. in December 2012, joined DTZ’s new ownership consortium as an investor and is scheduled to take the post of executive chairman in March.
As DTZ’s U.S. division, the former Cassidy Turley has access to financial muscle and geographic reach to further enhance a menu that encompasses tenant and landlord representation, property management, asset management, capital markets services, facilities management and a variety of consulting services.
Rapid changes in the industry are shaping the company’s thinking, as Stettinius explained over coffee last fall on a brief trip to New York City. A favorite example of game-changing trends is the rise of e-commerce. Distribution channels are changing “in ways that we might not have contemplated a year or two ago,” Stettinius said. “You have product types converging. The ability to support a client who is in those lines of business depends on your expertise in all of them.”
Technology, data and research likewise offer rich opportunity. Commercial real estate continues to lag other sectors in its use of information. “As an industry, we must become more sophisticated in how we collect, analyze and use data,” he said. Take, for example, DTZ’s 400 million-square-foot property management portfolio in the U.S., which generates an untold volume of information. “If we … analyze and measure it, we can make decisions that have better results for our clients.”
For DTZ’s new North American region, “the mandate is to continue to grow and mature,” Stettinius noted. Acquisitions will be a major part of that strategy. Among Cassidy Turley’s legacy service lines, a top priority is growing the company’s capital markets platform, which Stettinius called “an important element of what we do for investors.” The obsolescence that characterizes much of the nation’s office inventory is increasing the demand for development-related services. Stettinius sees a natural link there to Cassidy Turley’s strong tenant representation business.
Tools for Leadership
Longtime acquaintances say that Stettinius is ideally equipped by temperament, intellect and experience to carry out his complex mission. “He’s curious about everything related to his business,” Rabbit explained. “He doesn’t just understand brokerage, he understands brokerage and construction management and project management, and how they all relate to one another.”
Stettinius has gained that diverse knowledge through a variety of professional roles. Starting his career as a leasing agent in Washington, D.C., he represented the owners of such trophy properties as the Evening Star Building, Hall of the States, Farragut Center and 1111 Pennsylvania Ave. As a regional vice president for Equity Office Properties Trust, he led the company’s activities in Washington and Northern Virginia. He then moved to Jones Lang Wootton from 1987 to 1993.
In 1994, Stettinius started a 12-year run at Trammell Crow, and by 2001 he had been promoted to national project leasing practice leader. That year, a career milestone arose when he was asked to take and revitalize the company’s service business in the Mid-Atlantic. That position was “a seminal event in terms of becoming a leader,” Stettinius noted. “It really demonstrates that opportunity is created by filling a vacuum. If you can find things that need to be done, you need to seize them.”
Stettinius briefly came on board at CBRE as part of the Trammell Crow acquisition, and in 2007 he became CEO of Cassidy & Pinkard Colliers, a position he held until Cassidy Turley’s launch three years later.
The formation of Cassidy Turley itself says much about Stettinius’ leadership skills. “He laid out his vision for what was then a local brokerage firm. He wanted to think bigger than that and make a national platform,” Rabbit said. To that vision, Stettinius brought an astute sense of tactics.
Even as he shapes the larger strategy, Stettinius remains detail minded. Rebecca Owen, chief legal officer & senior vice president at Clark Enterprises Inc., still remembers a pitch to expand the leasing services provided by Cassidy & Pinkard Colliers.
“He showed up at my office with a team of people and books of data and fancy marketing material,” she said. “He didn’t have to do that himself—he had plenty of people underneath him.”
As a result of Stettinius’ persuasive skills, Clark expanded the firm’s scope of services to include property management and asset management. Owen had come to appreciate his mastery of detail when he was a leasing agent for Trammell Crow. While representing one of Clark’s office properties in Washington, D.C., Stettinius would sometimes stop by Owen’s office and provide her with an impromptu market update. “He could point to each building and give you the comps and the important facts,” she recalled.
Within a few years of Cassidy Turley’s launch, Stettinius and his team began exploring ways to broaden their company’s horizons. “Global is going to be a really, really important component of service delivery for clients. … It’s about making sure that we’re at the intersection of global capital flows and global commerce,” he explained.
With that in mind, Cassidy Turley’s leadership weighed the options. One possibility was hanging out a shingle in a half dozen top global business hubs. That, he noted, would have created “the specter, the patina of being global.”
Instead, they concluded that a better bet would be to sell Cassidy Turley to a company with a complementary platform. The ideal suitor, they decided, would bring a distinct combination of qualities: service lines and geographic markets with minimum overlap; a strong presence outside the U.S., particularly in Europe and Asia; and deep resources. DTZ Group turned out to fit the bill.
Joining the firms entailed several steps. Last June, Sydney-based UGL Ltd. agreed to sell DTZ for about $1.2 billion to a joint venture of TPG Capital, PAC Asia Capital and Ontario Teachers’ Pension Plan. In September, once the latter firm was under new ownership, Cassidy Turley agreed to be acquired by DTZ.
Like all such transitions, Cassidy Turley’s shift to a unit of DTZ undoubtedly involves a fair amount of client education. Yet Stettinius has racked up plenty of experience as a change agent. As a Cassidy Turley co-founder, he helped reinvent a confederation of regional firms into a diversified national service provider. Step one, in August 2008, was unifying the management of four former Colliers International affiliates. (For a detailed look at the evolution of Cassidy Turley, see the “Family Tree.”)
Timing the Launch
At the outset, the company could claim fourth place among U.S. service firms, with 429 million square feet of managed space and $15 billion worth of transactions for 2008. The timing of the launch, which took effect in March 2010, was no accident.
“Given the challenges in the world during the recession, it gave us the latitude to do some things that would be very difficult to do” in more prosperous times, Stettinius explained. “We were on offense when a lot of our competitors were a little more reluctant to make those bets.”
The fledgling firm’s leaders crafted their plan with care, bringing in consultants to advise them on vision, strategy and branding. A principle that guided the new company’s scale and service offerings, Stettinius recalled, was “the ability to win at any level.”
Much has changed since that late winter day in 2010 when Cassidy Turley made its formal debut. Commercial real estate is increasingly global in nature, technology brings new possibilities and challenges, and the industry has responded to the lessons of an historic recession.
After a swift rise to elite status, the Cassidy Turley name is itself history as its legacy firm joins the competition for dominance. For Joe Stettinius, it has been an amazing five years, yet he hints that the best is yet to come: “I feel that we’ve been on a fantastic journey that in many ways is just beginning.”