GAR As­so­ciates unit splits; opens of­fice for na­tional firm

The Buffalo News - - BUSINESS - By Jonathan D. Epstein NEWS BUSI­NESS RE­PORTER

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.”

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