Editor's Note: This version has been corrected to clarify Los Angeles-based CBRE purchased ING's real estate investment management businesses in Europe and Asia, not Clarion Partners.
After a 15-year relationship, Toledo's largest commercial real estate firm, CBRE Reichle/Klein, said Tuesday it is severing its affiliation with national commercial real estate service provider CBRE Inc.
The Toledo firm, which experienced immense growth in size and fortune over the last decade through the affiliation, will return to using its original name, the Reichle Klein Group, starting July 1.
CBRE originally bought a 10 percent stake in Reichle Klein Group when the Toledo firm sought affiliation in 1997.
That stake had decreased to 5 percent, and the Toledo firm will reacquire those shares as part of its de-affiliation process.
Though they will no longer be connected, both firms have promised to maintain a working relationship on a nonexclusive basis. The Reichle Klein Group will perform assignments in the Toledo market for CBRE when appropriate, and the two firms will collaborate on client services for existing assignments.
Harlan Reichle, senior managing director of the Reichle Klein Group, said the idea of severing ties came up a few months ago when the Toledo firm was considering renewing its affiliation.
Over the last 15 years the former CB Commercial Real Estate Group Inc. had changed its name twice, most recently to CBRE, and had grown into a network able to service large commercial real estate markets and property owners with vast portfolios.
The Reichle Klein Group had benefitted from the ties, going from the third-largest commercial real estate firm in the Toledo market with a dozen employees and offices in suburban Holland to the largest, with 45 employees. In 2007 the firm acquired northwest Ohio's largest commercial real estate brokerage, Michael Realty Co., and moved downtown, most recently occupying space on the 26th floor of Fifth Third Center at One SeaGate.
Last year Los Angeles-based CBRE purchased ING's real estate investment management businesses in Europe and Asia, and its global securities business. Although the acquisition gave CBRE a true global presence, the addition was of little use to clients in the Toledo market. And although Reichle Klein manages more than 1 million square feet of property locally, the Toledo market was too small to add much to CBRE's portfolio, Mr. Reichle said.
When both companies weighed the cost and benefit of their relationship, neither saw much advantage in continuing it, Mr. Reichle said.
"You're constantly sort of reassessing your business model and your resources and how well they serve your clients. … We both grew out of the need or the business case for the affiliation," Mr. Reichle said.
CBRE had purchased offices in some locales where it wanted to maintain its market presence.
"In our case, they didn't want to buy us," Mr. Reichle said. "And I found that I can now reinvest in my business in ways that will be beneficial to our clients and our brokers and that will accomplish our goals for our clients. Affiliation was getting really expensive," he said, declining to discuss the cost.
Mr. Reichle said he felt the money spent on affiliation could be better used elsewhere, such as developing his company's own real estate databases and using other commercial real estate networks as needed.
"We will make a heavy investment in a Web site that's truly a commerce site and not just an electronic brochure," Mr. Reichle said.
"I think we are all excited here about going forward as an independent company," he added.
The loss of affiliation provided a perfect chance for a new company name -- Mr. Reichle's original partner, Dan Klein, left the firm a few years ago -- but Mr. Reichle said brand experts suggested using the firm's original name and created a new logo.
"Reichle Klein, that's what we've been since 1994 when we started," Mr. Reichle said.
"Really, it's the same people, same organization, same space, same phone number. The only thing that will change is Web address and the name," Mr. Reichle said.
The company's services will also remain the same -- commercial real estate brokerage services, property investment, and property management.
"I am back to where I started in some respects, but I'm also so much farther down the road," Mr. Reichle said. "We're just at the next phase, next level."
Contact Jon Chavez at: email@example.com or 419-724-6128.
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