In December, Kidder Mathews announced the promotion of Seattle-native Jim Bowles as the president of its Brokerage Services Division. In his new role, Bowles will oversee the firm's efforts in California, where the Kidder Mathews sees tremendous opportunity for growth. According to Bowles, Kidder Mathews already has a very strong presence in the Bay Area, which it plans to grow organically through acquisition of talent and an eventual opening of an office in the East Bay.
We sat with Bowles to understand better the firm's goals and ways through which the Kidder Mathews will try to achieve its goals in California and beyond.
You are now the head of the brokerage group at Kidder Mathews, with large plans to grow further in Northern and Southern California. Can you outline for us your broad goals to achieve that?
The Kidder Mathews structure is unique in the industry in that we are a regional company that is owned and operated by the employees, for the employees. The company has no debt, no outside ownership and is not burdened with extensive operational overhead. As a consequence, we are able to attract industry-leading professionals and provide them excellent services on an effective yet streamlined platform, all while offering favorable and accelerated commission rates to our producers.
Considering the success we've already had in rolling out our way of doing business in the Bay Area, we believe there is enormous untapped market potential elsewhere in California, especially in the southern part of the state where our newest office is located. In general, we feel there is great demand among potential customers, and professional talent, for a different approach to real estate services. Kidder Mathews is built entirely by owners/producers and we put a premium on the needs of clients and employees rather than on the expectations of outside and uninvolved stockholders.
Where do you see larger opportunity for Kidder Mathews, in Northern or Southern California? Why?
We have an enormous opportunity for growth all throughout California, but given that we already have a very good structure up and operating in the Bay Area, we probably have the most immediate opportunity for outstanding growth in that market. In the long run, however, as I mentioned previously, Southern California offers Kidder Mathews a giant opportunity for expansion and growth, starting with our new office in San Diego. We expect to enter the LA basin in the near future by engaging experienced professionals throughout that market. We are not in a hurry but are exploring our opportunities with the knowledge that our capability of immediate response is unmatched for an operation of our size. We can move quickly and decisively and plan to do so when the right opportunities come along.
Are you comfortable with the level of professional expertise you have in the Bay Area? If not, how do you plan to grow it?
We have a great team and outstanding leadership in the Bay Area with Reed Payne at the helm. Our Life Sciences group is second to none with stars like James Bennett & Tim Mason in San Francisco, Gregg Domanico on the Peninsula, Reed Payne, who is integrated in the Silicon Valley market, and Skip Whitney who heads up our China Services. We have also had quite a bit of success recruiting 20 service providers in California over the past 18 months.
The market is enormous, however, and our opportunity for growth is nearly unlimited. We intend to take full advantage of the market by adding additional professionals, service lines, and offices as needed and as opportunities present themselves.
What differentiation will Kidder Mathews provide as a service provider in the Bay Area?
As a commercial real estate services company, Kidder Mathews is really the sum total of our teams and our individuals. What makes Kidder Mathews most different from our primary competition, which we believe is predominantly composed of corporately- or publically-owned companies, is our culture and structure. Everything we do is intended to support firstly our customers, and secondly our professionals. All of our time, effort, and resources are focused on building a company and culture that attracts the top professionals in the industry. We have no outside or overriding agendas that conflict with our mission.
Please describe for us the commission arrangement that you have with your brokers?
It is very simple. Our brokers retain 50 percent of any fees paid to Kidder Mathews through them until they gross $125,000. Beyond that threshold, they retain 90 percent of any fees paid to Kidder Mathews through their efforts.
This level of commission split is clearly a sign to the brokerage community to consider you as a viable option in the Bay Area for employment, but are there other areas of professional expertise that you bring to the table that will make the job of the broker easier to conduct business? In other words, other than money, what other things will entice brokers to come work at your firm?
That is the best question of all. The top three things that that are compelling to brokers when they assess where they want to work are, the culture, the people and the environment, and this is really where we excel. It is also important to provide the best tools, resources and support. From experience, I know firsthand that these are outstanding as compared to our competition. We are able to provide this for our professionals, even with our aggressive commission splits, because our overhead structure is under control.
Are you planning to open additional offices in the Bay Area? If so, where?
We just opened a new office in San Diego last week, which is our first office in SoCal, and our next Bay Area office will be in the East Bay area as soon as the right opportunity presents itself.
How optimistic are you about 2015? What do you think the Bay Area is doing right?
2015 appears to be shaping up to be an outstanding year for business and growth for Kidder Mathews. Clearly the tech sector is driving all facets of our local and regional economy, and we don't foresee that slowing down anytime soon. We are keeping our eyes on interest rates. They are at historic lows, and it is reasonable to expect them to cycle back up somewhat in the next year or two. When they do, it will have some impact on the economy. But for now, barring something unforeseen, we expect the market to remain dynamic and robust.
What challenges do you foresee in the Northern California region in the next 12 to 18 months?
For Kidder Mathews, our biggest challenge will be to grow our operation and build our brand in the Bay Area. We are all about our clients and our people. We are not new to the market but we are in the process of shifting gears to focus on market share growth through expanding our teams and our services. You can expect to be hearing much more from Kidder Mathews in the months to come.
What are we not asking that we should be asking?
Let's talk more about "Why?" top professionals from our competitors would leave the comfort of their current companies to join Kidder Mathews?
There are really 3 reasons as we see it...
- Culture: We are in the process of consciously and intentionally creating the most inspiring and caring culture for experienced professionals to operate in. As corporate America focuses more and more attention on answering to outside investors, Kidder Mathews is committed to building an operation that is owned and operated for ourselves and by ourselves, with the purpose of creating a family of professionals dedicated to providing the best services possible to our customers.
- Services and support: As a long-established and sizable operation, Kidder Mathews is able to provide tailored services as needed for our professionals and our customers without having to limit or overly manage their creation or delivery. We are not bound by the crush of bureaucratic or top-down corporate control. The magic of advanced technology provides us the freedom to provide what is needed, how it is needed, when it is needed.
- Financial leverage: Due to our structure, we are able to offer an outstanding culture and great services and support on a streamlined corporate platform that allows us to be profitable while sharing the lion's share of our revenue with our professionals. We are not building a company that is designed to go public. We are building the ultimate regional operation that is designed to reward our owner/producers while focusing not on Wall Street returns, but on customer service.