EDGE Experience Diligence Guidance Execution



Citybizlist.com, Patch.com, The Gazette and Virginia Business Magazine covered this press release.

March 5, 2014 (Bethesda, MD) – EDGE Commercial Real Estate, the leading locally owned commercial real estate advisory, management and investment company in the Washington metropolitan area, announces today that, due to strong client demand for its fully integrated services, this year the firm expects to double the number of advisers it employs.

Presently, EDGE has a staff of approximately 50 people. In three years, the company anticipates its total work force will jump to 150 professionals.

To accommodate its ongoing expansion, EDGE, which already has offices in Maryland and Northern Virginia, later this year plans to open a third location in Washington, D.C.

Dating back to its founding in 2007, EDGE has increased its annual sales by 500 percent and its staff by 1,000 percent. The company projects revenue growth in excess of 25 percent for 2014.

“I wish I had a nickel for every time someone commented that we were out of our minds for launching a regional commercial real estate services firm into an atrocious economy to go head-to-head with huge, publicly traded firms. Nobody believed it was possible to compete with national and international service providers, but we knew we could, because our business model is superior. And, nearly seven years later, our steep growth trajectory throughout has validated our model,” says Joseph A. Sutton Jr., EDGE’s Managing Partner.

EDGE is tackling head-on, with much success, a formidable challenge in the commercial real estate world well known as the “check the box syndrome,” where some asset managers are only comfortable hiring large firms.

“Unfortunately, the institutional asset manager position, by nature, is frequently a very transient position, because it is so closely tied to asset performance. Consequently, we are, on occasion, confronted with asset managers that will only engage the ‘biggest’ service providers, since in their world the safest assumption with the investment committee, and their ultimate job security, is that ‘bigger is better.’ A large part of this perception is that larger companies have more boots on the ground to generate a higher level of transactional activity,” explains Ken Fellows, Senior Partner – EDGE Asset Advisory.

He notes, however, that this is not reality. “In fact, it often backfires as a deterrent, because adviser commission splits are frequently reduced by bringing a client to the company’s own listing. When we interview for new business, our success rate is disproportionately high, as one of the first questions we ask prospective clients is how many transactions they actually have completed with other advisers within the same competitor’s organization that they would have seen anyway, and the answer is almost, without exception, zero. While these residual perceptions remain to some extent, they are rapidly changing as sophistication in the D.C. and Baltimore markets rises. This is a critical condition to which EDGE has been capitalizing,” Fellows says, noting that the firm already has numerous institutional clients, such as Advance Realty, Aetna Life Insurance, Alexandria Real Estate Equities, The Bernstein Companies, Colony Realty Partners, Federal Realty Investment Trust, Guardian Life Insurance Company of America and Lowe Enterprises.

It was seven years ago that EDGE entered the market with only a handful of people working out of an 800-square-foot office at a property they owned in Bethesda. Not only has the company’s sales steadily increased year after year, but so has EDGE’s profits; plus, the firm carries no debt.

“We’re extremely excited about what’s to come in 2014, because now that we have completed building an institutional grade infrastructure, we can now concentrate on significantly growing our advisory practice, which in turn will spur a considerable expansion of our property services unit. Economies of scale are not available to new businesses, and we knew building an institutional grade infrastructure would be a herculean proposition on a private capital budget. Last year, we successfully achieved this objective and without incurring debt – an accomplishment for which we are very proud,” Sutton says.

EDGE’s ultimate goal, he says, is to become the premiere fully integrated commercial real estate services and investment firm based in the D.C. and Baltimore metropolitan regions – and EDGE is well on its way to reaching this objective, given the firm’s track record and growth trajectory.

“We are a noticeably different firm – contrarian, in fact – and respected for delivering a higher level of service when results are absolutely mission critical,” Sutton says. “We emphatically believe that ‘bigger is not better,’ and we have no interest in being known as just another very large commercial real estate company.”

He adds: “Seizing opportunity requires tremendous expertise, a creative entrepreneurial perspective, and a corporate agility capable of moving very quickly. This is where we leave the bigger firms behind, and our track record proves it. Further, as strong supporters of our military, many of EDGE’s professionals are veterans with little tolerance for mediocrity.”

The EDGE executive team, Sutton notes, has nearly 180 years of collective senior-level experience. “We are owners of commercial real estate ourselves, and that runs at the front line of our transactional and management strategies, rather than detached and tucked layers away in another, often remote, department,” he says.

While the EDGE work force, by design, is smaller than some of its competitors, the firm is also a much more nimble version of these publicly traded companies, which is demonstrated by its superior results.

“We offer the same scope of services, including advisory and management services as a preferred partner with landlords, investors and tenants to provide professional guidance with commercial real estate underwriting, due diligence, capital markets, procurement, disposition, asset and property management, and construction,” Sutton says. “While large, complex transactions are where we thrive, we work with clients at any size or evolutionary stage, in both the private and public sectors.”

Additionally, EDGE has continued to generate a significant volume of advisory work across the country, and this is an area where Sutton believes the EDGE model is vastly superior.

“There is a perception that ‘larger’ firms with offices in other major U.S. cities are better able to support national-level requirements. This is simply not accurate. More often than not, the client is handed off to a local representative within the same firm, and the quality of representation is inconsistent and often inferior,” says Scott Mendelson, Principal – EDGE User Advisory.

With the EDGE model, advisers are maintained as a single point of contact to the client, regardless of the transaction’s geography. Therefore, for requirements outside of the Washington and Baltimore markets, “we simply parachute into town and interview the ‘best of the best’ local advisers in those particular regions. The cost of that local intelligence is funded by EDGE in a revenue-sharing arrangement at no additional expense to the client. The bottom line is that we retain the most comprehensive market wisdom geographically without disrupting the EDGE single point of contact. This is clearly benefiting our clients, and it’s yet another strategic advantage that sets EDGE apart,” Mendelson says.

About EDGE Commercial Real Estate:
Maryland and Northern Virginia-based EDGE Commercial Real Estate is a locally owned commercial real estate advisory, management and Investment company. The firm’s services are designed around a creative entrepreneurial spirit, and a regional company’s agility, which has enabled EDGE to deliver superior results to its clients and partners. The EDGE executive team possesses nearly 180 years of combined commercial real estate experience and a track record that includes many of the Washington, D.C., metropolitan area’s most noteworthy transactions, totaling nearly $6 billion. Currently, the firm manages more than 8.4 million square feet of commercial space throughout the D.C. region. For more information, please visit http://www.edgecre.com.

Posted in Edge CRE