by Mark Thomton
CHICAGO | At NAI Hiffman, success can be measured by the raw numbers, as the firm has become the largest full-service, privately owned real estate services firm in the Midwest with more than 26 million square feet under management. However, for principals at the firm, it is not the statistics that they point to first, but rather the office culture and employee retention rate. NAI Hiffman may be a difficult door to get through for many young, enthusiastic brokers, but once they are in, it is even more difficult to leave.
"We tend not to lose our brokers," says Dennis Hiffman, chairman and CEO. "Most people spend their entire career here. We have a lot of longevity. There is a strong mentoring program and we really want new hires to fit into the culture."
Michael Flynn has been with Hiffman for 22 years and through three different incarnations of what today is NAI Hiffman. He can't recall losing a broker to a competitor.
"I don't look at other firms and see old NAI Hiffman brokers," says Flynn, executive vice president. "The grass isn't greener on the other side. This is the last, best place."
A big contributing factor to this is the mentoring and time invested into young brokers by senior brokers. In some firms, new employees are seen as competition for business, but at NAI Hiffman they are seen as potential dollar signs. The firm has diversified ownership to 14 different shareholders, all of whom still work in the field.
"All of the owners are producers," says Flynn, who is also a shareholder. "We want to see this firm grow. The best way to do that is by mentoring our junior guys. If a junior broker isn't successful, it won't benefit me."
John Cash, executive vice president, has been with Hiffman for 17 years and heads up the industrial brokerage. He attributes the firm's growth to its external relationships as well as its internal relationships.
"We have great relationships with other brokerage firms," says Cash. "It's an interesting business. One minute they are competitors, but the next we are cooperating on a deal."
The firm's exponential growth as enabled the company to grow from 29 employees in 2000, when it branded the NAI name, to more than 200 today. The success from its organically grown brokers has lead to expansion into other areas of the business. Asset management has become a big part of the services NAI Hiffman offers today. Recently, the firm received a big boost when it won a portfolio that contained 77 properties totaling 14 million square feet. This brought 12 new clients and 380 new tenants to the firm.
David Peterson, CEO of NAI Hiffman Asset Management LLC, says that half of the business won by the firm is from companies switching service providers.
"Companies haven't switched to us because of fees or cost," says Peterson. "The reason is simple. Good real estate is based on location, location, location. Good partnerships are based on relationships, relationships, relationships. People want a personal touch."
A quarter of the asset management business is accumulated from another portion of NAI Hiffman. The newly established investment services team walks potential real estate property investors through the purchasing process, often passing them off to the asset management team.
Chad Firsel, executive vice president, will help clients locate potential investment properties across the entire NAI network. Chicago-area clients can invest in out-of-state or international properties, and, likewise, out-of-area clients can locate properties in Chicago. Because of the weakened dollar, international investors have become hot clientele for U.S. firms.
"I came here because of the NAI global network," says Firsel. "We work in 44 countries with 1,360 offices. If I do a national search I can hit 6,000 brokers in the network."
Firsel says that his business is primarily done in the Chicago market, but he has closed deals in 13 different markets. However, a large portion of the clientele is from outside of Chicago.
"The world is so flat now," says Firsel. "Fifty percent of our buyers are from out-of-state. We have made significant deals with groups from Ireland and Puerto Rico."
The original deal with the Irish group was for $5 million, but the firm now has a $25 million under contract. The asset management is handled by Peterson's division.
Another portion of the business that the firm is hoping to expand is the retail services group. NAI Hiffman's retail group offers a full range of services and works with both retailers and developers.
"We really want to build our retail services," says Ryan Murphy, executive vice president. "We currently have ten brokers working on the retail business, but we want to take that up to fifteen."
The firm recently hired Michael Meksto as managing director of the retail services group. He has more than 20 years of experience in the retail brokerage and will be responsible for expanding the business for NAI Hiffman.
"We have some great opportunities right now," says Meksto. "It's exciting to be a part of the development process."
It is this part of the business that Murphy believes sets NAI Hiffman apart from other competition.
"Not a lot of companies out there provide development services," says Murphy. "We can help a retailer find vacant land in a market and then walk them through the development process in that municipality."
For a firm that started off working exclusively with industrial properties, Hiffman is pleased to see its evolution into a full-service brokerage firm.
"We just kept encountering different situations and entering new markets," says Hiffman. "When we saw a new opportunity we took it."
The firm already has decades of experience, but what Hiffman marvels at the most is its young demographic scope. The senior brokers, or, "first generation" as Hiffman calls them, have performed well enough to continue to add new brokers through each phase of the firm's growth.
"It's a very young firm," he says. "The average age of our brokers is probably 42. If you take me out of the equation, it's probably under 40. We are on our fourth generation now."
Source: Illinois Real Estate Journal