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March 16, 2012

With partners lined up, Kidder prepares for China push

Puget Sound Business Journal

In a long reach for a regional brokerage, Kidder Mathews plans to tap into China's real estate sector with a new, three-way strategic alliance.

The Seattle-based regional real estate services firm, which has nine offices along the West Coast, will work with Philadelphia-based global real estate services firm Binswanger and Chinese asset manager Synergis.

The arrangement gives Kidder the reach of a much larger firm, with the ability to help its clients set up facilities around the world. It also gives Kidder connections to tap into the rapidly growing pool of Chinese companies investing in real estate in the United States.

"We've been able to make pitches we couldn't have done before, because we can now say we have the capabilities to help them," CEO Jeff Lyon said. "We can now market globally, which will help us maintain or get new business."

With 400 employees, Kidder is much smaller than its partners. Synergis has more than 6,000 employees in 10 offices in China, while Binswanger has more than 5,000 employees working in 95 offices around the world.

As part of the deal, Synergis provides companies setting up operations in China with services such as consulting on property development, and leasing and managing completed buildings.

Binswanger offers corporate advisory services mainly to large industrial manufacturers and distributors. The company works closely with Colorado-based project consultant CH2M Hill's Industrial and Advanced Technology Group and with global equipment provider GoIndustry DoveBid. Kidder handles sales and leasing transactions, property appraisals and property management.

The three companies will provide a range of services to clients in both China and the U.S. including consulting, sales and leasing, asset management and corporate advisory services. They are targeting clients in the industrial, office, retail, life science, technology and investment sectors.

The trio will also assist clients in the United States and China in finding locations in China for manufacturing and distribution facilities and building them. The partners will focus on the cities of Shanghai, Beijing, Shenzhen, Hong Kong, Qingdao, Foshan, Dalian, Handan, Xian, Guangzhou and Suzhou.

Additionally, Kidder will help Chinese companies find properties for operations or investment on the West Coast, while Binswanger provides assistance in the remainder of the U.S.

Earlier this year, Kidder assisted a Chinese firm in setting up InnoSpring, a small business incubator in Santa Clara, Calif., for startups that want to expand into China or the U.S.

The new strategic alliance enables Kidder to go after large deals that it couldn't have pursued before, Lyon said. It helped that one of Kidder's executives had a decades-long friendship with the chairman of Hsin Chong Construction, of Hong Kong, which owns Synergis.

Lyon went to China during the first week in September to discuss creating a China services group.

"It was very clear the Chinese government and companies were committed to becoming international companies and putting capital behind companies to help them grow internationally," Lyon said.

Putting together the strategic alliance has required Lyon to make multiple trips to China. The rapid growth and size of the real estate market in China has amazed him. Between Shanghai and Beijing is a string of lesser-known cities with populations of more than 10 million.

"It's like having seven more LA's up and down the coast," Lyon said. "A piece of property that was riverbank 20 years ago now has 75 million square feet of office space and 6 million residents."

China's rapid growth also extends to the United States. More companies are interested in opening offices in the U.S. while others are interested in investing in property here.

Lyon pulled out a recent map of the San Francisco Bay Area showing close to three dozen offices of Chinese companies now doing business there.

The new alliance is the latest in a series of affiliations for Kidder Mathews after the end of an earlier alliance with the GVA brokerage network.

"The reason we joined GVA was that it was a collection of very strong regional and super-regional companies similar to ours," said Lyon.

But following a string of deals, he said, "The four primary companies that attracted us were no longer part of the organization and we were the dominant partner left."

"At the end of the day," Lyon said, "I could grow GVA North America, or I could grow Kidder Mathews."

So a year ago, Kidder joined forces with Binswanger. The alliance enables Kidder, which focuses on leasing and sales transactions, to work with clients earlier in the planning process. Meanwhile, Kidder's presence in nine offices along the West Coast gives Binswanger an entrée into new markets.

Kidder's offices are in downtown Seattle, Bellevue, South Seattle, Tacoma, Olympia, Portland, and the California cities of San Francisco, Redwood City and San Jose. This year the company will open an office in the East Bay Area, possibly in Oakland, because there are so many industrial companies in that area, Lyon said. Kidder is also expanding its property management services into Northern California and will be building a China services group.

Copyright 2012, American City Business Journals. All rights reserved.

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