Crye-Leike pads menu with business brokerage services
June 11, 2004
Crye-Leike Commercial has expanded beyond its traditional real estate turf to take in the buying and selling of businesses.
Crye-Leike formatted a business brokerage division in September and has seven brokers focused on buying or selling businesses.
"We were leaving money on the table," says Keith Crowe, a new director of the division.
No longer. Crowe's crew has completed six deals since last fall and has another five pending.
Adding business brokerage services was a natural extension of services, Crowe says. In the past, clients wanting to sell commercial real estate sometimes were trying to sell a business at the same time, but the real estate company wasn't equipped to help.
Crye-Leike's business brokers' services span the spectrum of consulting, investment and income property brokerage, merger and acquisition assistance, site selection and tenant representation. Business owners pay a 10 percent commission at the time of their business' sale.
Crye-Leike isn't the first real estate company to provide business brokerage services.
"It does mesh well," says Debbie Foust, CEO of Hermitage-based Century 21 Music City. "The more you're capable of doing, the better you can serve your client."
Foust has provided business brokerage services for more than 25 years. Century 21 Music City, which has a business brokerage staff of four, has helped sell companies with sales ranging from $50,000 to several million.
Despite potential synergies between real estate services and business brokerage, not everyone is convinced Crye-Leike's move will pay off.
"I think it's a stretch," says one real estate professional about Crye-Leike's expansion. "It involves a lot of things that don't have anything to do with real estate."
Crye-Leike expects accountants, attorneys and financial institutions to act as lead generators for its business brokers. The company will work with clients in southern Kentucky and northern Alabama in addition to Middle Tennessee.
Crowe says revenue for business brokerage clients ranges between $100,000 and $3 million. Most are closely held companies.
"It really doesn't take that much more time to sell a million-dollar business than it does to sell a $100,000 business," Crowe says.
Business brokerage is an unregulated profession, which means the state of Tennessee does not require a license like it does for other professional services, says Bren Letson, owner of VR Business Brokers' Nashville office.
Traditionally, business brokers target companies with fewer than $20 million in revenue. Companies with revenue less than that fall off the radar of investment bankers who provide business brokerage services.
"There is this no-man's land between $1 million in sales and $10 million to $20 million in sales," says Letson.
To contact Nashville Business Journal reporter Brian Forrester, e-mail him at: firstname.lastname@example.org, 615-248-2222 ext. 115