Veteran real estate agents go it alone on brave new market

Leaving Colliers in spring this year was the hardest decision Horatiu Florescu, now president and CEO of The Advisers/Knight Frank real estate consultancy company, had ever made. The former head of the office department with Colliers left several months after his colleague, Monica Barbu, who is now vice-president and head of the retail division at the same firm. “In winter last year I took a longer vacation and evaluated my options. When I heard Horatiu had also left, we met and realized we worked well together and this was what we wanted to do together,” Barbu tells Business Review. “The hardest moment was when I left Colliers. It was hard, after so many years with them, to realize that I wanted to go,” says Florescu. “2007 and 2008 were very good years for me: I was number one worldwide in Colliers based on office transactions, so there was no reason to move on from this point of view,” he goes on. “It was nothing premeditated.” He had been working for Colliers since 1998, a year after Barbu herself had joined the then startup company. So starting a consultancy company from scratch all over again was not new for them. In fact, it was what they needed after so many years. “The market was very quiet back then. There were very few transactions in 1997-1998, quite similar to now. We were at the beginnings, and then people were optimistic about the market. It seems we like the adrenalin,” says Barbu. “We like to build; and this is what we've done for the last ten years – built. Now we have moved on to building something else all over again,” she goes on. Very soon after they joined forces earlier this year, they signed a deal with international real estate consultancy Knight Frank, which they brought to Romania, and this happened faster than they had expected. The new company, with a team of 22 senior consultants, is currently covering office, retail, industrial and more recently land deals. These are the market segments seeing activity nowadays. By the end of the year, the firm wants to add a valuation department and one for investments, and the team should increase to 25 people. Teamwork and optimism are the buzzwords for The Advisers/ Knight Frank. “The investment market will grow, so we want to prepare for when it is back on the up, by the end of 2010. I believe that in 2011 or 2012, if the market goes as I hope. It is true there are many companies with investments departments up and running, which is why we will try to focus on this area too,” says Florescu. Soon after starting the company, they secured the first deals, which happened in summer this year. The bulk of deals are starting to happen this fall. “The first deal was in summer, so it was not a quiet summer as many had thought. We had a lot to work, but transactions have just started to be signed,” says Florescu. It is still too early to evaluate numbers, say the two consultants, but if early next year they can afford to go on an incentive trip, then things will have worked out well. “We have been on many incentive trips in recent years, when the market was going well, so if we go on an incentive trip next year, this will be a sign that it went as planned,” Horatiu Florescu says. An incentive trip would be among the few vestiges left from the boom market of recent years. The scene is different, and consultants have had to adapt along the way. “The market has changed. Anyone who wants the market back to its 2007 and 2008 level doesn't understand the business and the current context. It will never be the same,” Florescu goes on. On the retail side, from the 100 shopping center projects which have been announced, if five happen in the next two years, it will be an achievement, says Monica Barbu. “This says a lot about the frenzy on the market at that time and about people's expectations, which had to be re-adjusted,” she goes on. “We have to look more carefully at what happens on markets abroad and at what concepts can be applied to the Romanian market. So far, indeed, we have had many developers coming, but they took as their example what happens on more developed markets. But not everything which works abroad can work in Romania. We have to be more careful from now on,” says Barbu. Consultancy too has changed. “From what happened in 2007 and 2008 we saw that the role of the consultant is very important. In previous years, one could have afforded to make a mistake as an investor, but now having a good consultant is more important than ever,” Florescu believes. It is in times like this when good consultants consolidate their positions on the market, he thinks, as long as they know their products and the services they need to offer, which should always come with something extra compared to what competitors are providing. “For example, the retail market is more sophisticated nowadays, and consultancy now needs to go beyond the surface. In recent years, a broker could have just accompanied the client to a shopping mall to show them a space, and then the contract was signed. It was basic consultancy, and we won't see that again,” says Barbu. She expects the department she is leading to be busy with Victoria City Center, a shopping center project on Bucurestii Noi Boulevard which will be launched later this fall. When referring to the pair's decision to go it alone, Barbu says they didn't expect it to be easy or hard. “We knew we wanted to do this. We are not the kind of people to complain and anyway we have nothing to complain about,” she concludes.