Northmarq Acquires Stan Johnson Company, Expands Investment Sales Reach
The deal further solidifies Northmarq’s spot as a full-service sales brokerage and capital markets platform
Pending regulatory approval, the deal is anticipated to close in October. When it does, Northmarq’s headcount will total 1,000 professionals across its investment sales, debt/equity financing, loan servicing and fund management operations. No acquisition price was disclosed.
Founded in 1985, Stan Johnson Company is headquartered in Tulsa, Okla., but has 16 offices in 10 states. It focuses on investment sales advisory across asset classes, with specific expertise in the triple-net lease, retail, office, industrial, self-storage and health care sectors.
The deal further expands Northmarq’s investment sales reach — a business line that kicked off in 2018, and has since expanded into 22 offices in 13 states. With the Stan Johnson transaction underway, the plan is to now continue the expansion to every state that Northmarq is currently active in with its other service lines.
The deal came about when Stan Johnson engaged investment bank Houlihan Lokey to explore a potential sale, who then brought the opportunity to Northmarq.
“From our initial contact we were extremely interested, as Stan Johnson Company fit the right opportunity at the right time for Northmarq,” Jeffrey Weidell, CEO of Northmarq, told CO. “Just under five years ago, Northmarq embarked on a strategic expansion into the investment sales business to complement our existing debt and equity platform and expand our capital markets services to our clients. We started in multifamily and have had great success in building out the platform nationally with enthusiastic support from our clients. The next step is to move into other product types, and the Stan Johnson Company is a very desirable fit with their [triple-net lease] and retail strength, and industrial and office sales expertise.”
Additionally, “culturally, we are aligned with a client-first focus,” Weidell said.
The acquisition comes at a time of extreme market volatility and a slowdown in investment sales as buyers and sellers figure out their next moves. But, where there’s disruption there’s also opportunity.
“Offering alternatives is always a good thing, and with a strong triple-net leased presence, we can offer investors a stable return alternative in a volatile market,” Weidell said. “Still, we view our ability to service buyers and sellers in multiple product types as beneficial in all market conditions, and this diversification is a long-term strategy for us.”
While Northmarq is busy broadening its client service offerings, there are no plans to move those offerings outside of its capital markets business, for now at least.
“A core strength of Northmarq is serving our clients in the capital markets; buyers, sellers, owners, investors and lenders, on the loan-serving side. Whatever we do, we want to do well, and we want to be in the upper echelon of the market,” Weidell said. “At this time, we still see plenty of areas for us to expand in the capital markets business before we contemplate venturing into areas such as leasing and management where there are so many well-qualified competitors.”
Since its founding, Stan Johnson Company has executed approximately 7,500 sales amounting to more than $45 billion. Stan Johnson, founder and CEO, said the company’s vision has been “to build a very special, diversified real estate company with a singular focus on providing the highest level of service to our valued clients.” With the backing of Northmarq’s larger infrastructure, Johnson said, the company’s professionals will be able to offer “greater investment opportunities, advice and product offerings by leveraging the size, scale and established expertise of the Northmarq brand.”
Johnson will remain with the company for several months to facilitate the transition.
The deal is the latest in a series of acquisitions that have helped to expand Northmarq both in terms of headcount as well as geographic footprint.
“The addition of the Stan Johnson Company team will provide Northmarq the opportunity to offer our clients enhanced services related to retail, industrial, office and corporate solutions,” said Trevor Koskovich, president of investment sales at Northmarq.
And, it positions the company well for when the market stickiness is over.
“We have had the obvious move in interest rates this year along with some accompanying cap rate shift. The unanswerable question everyone wants to know is: Has this trend ended, and if not, when will it end?” Weidell said. “People are afraid to make a move, which may look wrong six months from now. Additionally, since cap rates are stickier than interest rates, the amount of leverage borrowers can obtain is lower, thus more equity is required in an uncertain time. Both these concerns slow activity but don’t end it. Once some direction is settled, I see a strong pipeline of business ready to transact.”