Kentwood Commercial is not just the latest commercial real estate brokerage launched in Denver.
“Commercial real estate for me has always been a huge passion,” Peter Niederman, CEO of the new firm as well as the residential real estate firm that also shares the Kentwood name, told me last month.
“I didn’t start Kentwood Commercial just because I thought it would be a good business, although I do think it is, but because I am so passionate about commercial real estate,” Niederman continued.
Niederman certainly has real estate creds.
This year, the 250 residential brokers at Kentwood Real Estate are on target to sell $2.3 billion in homes. In the past, on sales dollar volume per agent, Kentwood brokers have topped the nation.
So when Karen Zeile, Kentwood’s lone commercial real estate broker and Niederman’s longtime friend and commercial real estate veteran David Morrison, called Niederman about a year ago to suggest he launch a commercial real estate firm, Niederman didn’t hesitate.
“The truth is, I had considered Kentwood Commercial for years,” Niederman confided to me.
Indeed, he filed the name Kentwood Commercial with the Colorado Secretary of State in May 2007, a records search reveals.
“When Karen and David Morrison approached me about starting a commercial real estate firm, it was like a hand-and-glove fit,” Niederman said.
“It was the right time and as you know, everything is about timing.”
Morrison first met Niederman in the mid-1980s, when Morrison was a vice president at Brookfield Properties, and its predecessor companies Oxford-Ansco (Ansco was short for Anschutz, by the way) and BCED.
The connection with Morrison, who later was a broker at commercial real estate firms including Colliers International, Grubb & Ellis and CBRE, runs even deeper.
“I went to Cherry Creek High School with his wife, Linda, Linda Moore,” Morrison said.
Linda was the daughter of Bill Moore, who for decades ran his family owned residential and commercial real estate firm.
“Honestly, Bill’s first love was commercial real estate, even more than residential real estate,” Niederman said.
Morrison put it this way: “Peter Niederman has tremendous commercial real estate DNA.”
Morrison, who turned 60 last April, said Kentwood Commercial is the perfect fit for him.
“This will be my last rodeo,” Morrison said. “I really wanted to finish at a place where I could put to work everything I’ve learned over the last 30-plus years, both at Republic Plaza on the corporate side and as a broker. Plus, I just love this business.”
Morrison credit Zeile as the “internal catalyst,” who was instrumental in creating Kentwood Commercial. “Karen and I had known each other for a long time and she contacted me about the idea even before I spoke to Peter,” Morrison said.
Last year, Niederman sold Kentwood Real Estate to HomeServices of America, an affiliate of Warren Buffett’s Berkshire Hathaway Inc.
Last year Berkshire reported $2.8 billion in real estate revenues, up 11 percent from 2015.
In the first quarter of 2017, Berkshire’s real estate brokerage revenues increased 19 percent on a year-over-year basis to $587 million.
The “impact of business acquisitions” was attributed to the jump, according to a Berkshire SEC filing.
Part of that is surely attributed to Kentwood.
While the amount Berkshire paid for Kentwood was not disclosed, word on the street is that it was by far the most ever paid for a realty brokerage firm in Denver.
Kentwood Commercial currently has six brokers, including Morrison.
They include: Mike Fickinger, formerly with Cushman & Wakefield, CBRE and Studley; Rodney Gustafson, formerly with Case Commercial, the former Frederick Ross Co. and Pinnacle Real Estate; and Matt Anton, who came from Sullivan Group Real Estate Services.
Zeile had been Kentwood’s only commercial real estate broker for the past nine years. Zeile has sold commercial properties in downtown neighborhoods including LoDo, Upton, the Golden Triangle, Ballpark and RiNo.
Combined, they have about 120 years of commercial real estate experience. During his career, Morrison has leased more than 3 million square feet of office space in more than 500 transactions and has sold more than $100 million in commercial properties.
Morrison said he expects to increase the size of the office to 10 brokers in the near future, including one or more industrial brokers. He also plans to eventually launch a property management division.
“Of course, with 10 brokers we will never have $2.5 billion in sales,” Morrison said. “The math just doesn’t work. But I think that $100 million in transactions a year is very doable.”
Niederman said he could imagine even more commercial brokers, perhaps eventually having 15 to 18. “We will remain a boutique firm, but we will cover all of the commercial real estate food groups: office, industrial, retail and multifamily.” Kentwood Commercial currently is listing space to lease and buildings to sell.
Niederman and Morrison both believe that Kentwood Commercial is in a unique position in the Denver area, as there will be synergies between the residential and commercial sides.
“Kentwood is a household name, and while we sell homes in all price ranges, we happen to have a very strong presence in the luxury housing market,” Niederman said.
“That means we sell a lot of homes to C-suite individuals, CEOs and business owners” who may have commercial real estate needs.
Kentwood Commercial also expects to build the opportunity to work with other Berkshire commercial brokerage firms across the country, as well as potentially providing commercial real estate services to companies owned or affiliated with Berkshire, the company said.
“David (Morrison) and Karen (Zeile) very quickly picked up on that potential,” Niederman said.
Also, brokers at Kentwood Commercial already have three offices where they can work, including 1660 17th St., across from Union Station, where Kentwood City Properties is located; 215 St. Paul St. in Cherry Creek North; and Kentwood’s headquarters in Greenwood Village.
Niederman also is developing a 75,000-square-foot boutique office building, One DTC West, which will serve as Kentwood’s headquarters when it opens next June.
“It’s interesting if you look at the dots how Kentwood Commercial is kind of coming full circle for me,” Niederman said.
“When I was an architect, I didn’t design residential homes, but commercial buildings and not just commercial buildings, but high-rise commercial buildings like Republic Plaza,” Niederman recalled.
In more recent years, he has purchased office buildings in Cherry Creek North and the Denver Tech Center, as well as retail-zoned land in Parker.
And Morrison, while thinking of big picture potential opportunities for Kentwood Commercial, remains an active broker.
“In our first month, Mike Fickinger and I sold a building in Cherry Creek North for $6 million,” Morrison said.
Niederman and the Kentwood Commercial team are thrilled that Kentwood Commercial is a Berkshire Hathaway affiliate
“Peter and I and Karen probably will go to hear Warren Buffett speak at next year’s Berkshire Hathaway meeting,” Morrison said.