GAR Associates unit splits; opens office for national firm
GAR Associates, one of Western New York’s longstanding appraisal and market research firms, has lost a significant valuation and research team to an out-of-town competitor, after nine employees – including one of its owners – departed to open a specialized new Buffalo office for global real estate advisory firm Newmark Knight Frank.
The team – led by Executive Vice President M. Scott Allen, son of former GAR CEO Walter R. Allen – left GAR to join Newmark’s Valuation & Advisory practice.
Besides Allen, a 33-year industry veteran, it also includes Senior Vice President David Carlon, senior appraiser Joseph Sievert, senior research analysts Brian Smith and Phil Buffone, research analyst Eric Broughton and analyst Erin Schafer.
Newmark and GAR are competitors in the traditional appraisal market, although Newmark and other national firms are not heavily active in upstate and Western New York. Allen was not available for comment on Friday.
But representatives from both sides said the split was amicable. GAR partners Ronald J. Rubino and F. Cindy Baire said Allen’s practice is significantly different and much more national in scope than what the rest of their company does and is not a threat to their core business.
Both expressed support for Allen’s decision, which came after almost a year of discussion and transition. Allen’s team is even still located in the GAR offices.
“It’s very specialized. It’s nothing that we are involved in,” Baire said of Allen’s practice. “We’ve all been working together to help him get there.”
Rubino said that GAR has occasionally been targeted for a buyout by “large national and international firms,” and Newmark originally approached the firm a year ago about an acquisition.
But Rubino and Baire said they valued their independence and their local decisionmaking. Most of their business is concentrated across upstate New York, with additional offices in the Finger Lakes and the Albany area.
“Cindy and I like what we do. We do business with high-quality customer service. We wanted to continue doing what we’re doing,” Rubino said. “We want to be our own bosses and be in charge on a day-to-day basis of what we do.”
By contrast, Allen’s business has evolved into conducting specialized market studies and analyses for multifamily apartment projects nationwide, serving as a consultant on what type of projects to build, what rents to charge and what ratio of tenants can be low-income. He doesn’t do traditional appraisals for fees, as GAR does.
As a result, much of his work comes before construction or an adaptive reuse begins, and often deals with grants, tax credits and other economic incentives, as opposed to placing a value on an existing building for purposes of acquisitions or financing, Rubino explained.
So when Newmark came along, Allen had more interest, seeing it as an opportunity to expand his business.
“Scott’s business model is completely different than ours,” Rubino said. “He’s so good at it that there’s a national appeal to what he does and he has a national client base. It’s kind of an interesting turn of events, but we wish Scott the best.”
Newmark, part of Newmark Group along with London-based partner firm Knight Frank, has 16,000 professionals operating from 430 offices on six continents.
John Busi, president of Newmark’s Valuation & Advisory practice, called the Buffalo group “one of the preeminent teams in the HUD multifamily space.”
According to Newmark, Allen will focus on valuation and market studies related to Housing and Urban Development Federal Housing Agency projects, with a concentration on affordable housing, low-income housing tax credit and conventional multifamily valuation work. Carlon and Sievert also will focus on multifamily and residential housing.
Rubino acknowledged that “it’s possible” that Newmark could later try to compete more directly against GAR, but he said he isn’t worried.
“There’s always new competition, so we’re ready to take on the challenge if that occurs,” he said. “I just think our best line of competitiveness is to keep that hometown approach.”
Baire said the firm is seeking to grow its business again. “We are in the process of looking at some acquisitions and also expanding into other states,” she said. “We have dabbled in it over the years, but we are actively looking at it now.”