Expanding Practice
New CBRE retail chief Anthony Buono wants to double the size of the firm’s business volume.
Interview by Randall Shearin

Anthony Buono, executive managing director of CB Richard Ellis.

CB Richard Ellis (CBRE) recently named Anthony Buono executive managing director to head its retail practice in the Americas. Buono, who is based in the firm’s La Jolla, California, office, spoke with Shopping Center Business recently about this new challenge, where the firm is headed and how it plans to get there.

SCB: You have a long history with CBRE. How has it led up to you taking the reigns of the company’s retail practice?

Buono: I’ve been with CBRE for 11 years and in the retail industry for 20. My experience within CBRE has been diverse working in every major part of our business with a legacy of building the business line I am responsible for. Beginning with asset services, building CBRE’s retail capabilities, then leading our retail services practice in the West integrating brokerage, capital markets, consulting and asset services. And over the last year, in the West, I enjoyed directing our capital markets investment properties business for primarily institutional oriented clients. This experience in all segments of retail real estate has helped me to better understand what our clients need across all segments of their business. And as you know Marianne Waggoner, our former head of retail for 8 years, elected to step down and the company asked me to assume this position and run retail services for the Americas. I am thrilled with the opportunity.

SCB: CBRE’s major efforts over the last few years have been to unify its services and offerings in order to increase its practice. How are you going to continue that focus?

Buono: Yes, I believe we are unified in retail, and that due in large measure due to the work that Marianne [Waggoner] and our brokerage professionals have accomplished on their own. Marianne created an internal focus to make sure that our integration and the ‘connecting the dots’ strategy within our platform was synchronized. CBRE’s retail practice today is well positioned and in great working order, yet the overall retail market remains highly fractured with myriad smaller firms and regional providers. None of our competitors have a significant overall market share in the U.S. compared to CBRE. We know our retail business is the largest in the Americas, however our overall share of the entire market is also relatively small, demonstrating the potential to grow our fair share. Our clients know that we service retail business well in North America. However, our goal is to be the dominant retail firm in the Americas with global execution in Europe, Asia, Africa, Australia and the Middle East that can’t be replicated. We have large ambitions.

SCB: Care to part with any of them?

Buono: For one, we’d like to double our retail business in the Americas. Our transaction volume in 2005 was good. Last year, the retail team transacted 3,140 leases as landlord rep or tenant rep. The leasing value of those transactions was around $3 billion. Retail investments represented last year were about $6 billion and in the Americas, we are managing between 45 to 50 million square feet of retail, depending on the month. We’d like to double these numbers pretty quickly. We see a lot of opportunity for growth from our clients on the retailer or occupier side of the business, with continued growth from capital markets and agency leasing.

SCB: With all of this doubling, are you looking to hire people?

Buono: We believe we can double our revenues with about the same number of people that we have in our retail platform now. Having said that, do we want to hire people? Yes, but we have been selective about those hires including key acquisitions. There are markets where we want to increase our market share through new hires or acquisitions, and others that do not warrant change.

SCB: What are some new opportunities where you see the ability to help landlords and tenants?

Buono: Retailers and landlords continue to seek ways to optimize their real estate functions. More and more clients are seeking multi-market execution that is seamless. We are very well positioned for that work. We are also seeing an enormous amount of private equity regenerating real estate back to the private market. Examples of this are landlords like Pan Pacific and Kimco and retailers like Albertson’s and Mervyns. Much of this real estate is being recapitalized and we are currently assisting these clients with strategy and execution.

SCB: What are some of the national trends that you are watching?

Buono: Private equity is definitely one of them. We’re also sensing a bit more stress on some retailers to optimize their stores. We’re seeing more business in that sector, at least from an RFP standpoint. A lot of retailers are reaching out for assistance for optimizing their real estate. On the equity side, there is really no let up there. We are seeing continued demand for core properties and value added investments. Institutional allocations for ground-up development have increased. Unless the capital markets change near term, you are still going to see a significant amount of private equity pressuring the public market to buy those assets. Ultimately, these are going to be plowed back into the private market. The Kimco-Pan Pacific transaction is a good example of this trend.

SCB: What are the strongest markets for retail investment right now in the U.S.?

Buono: Florida and California are at the top of everyone’s list. There is also a swath from Utah, Nevada, Arizona, and Texas that is appealing. That whole Sunbelt region is following the baby-boomer generation as they move or buy homes in these sub markets. We foresee strong investor interest in submarkets like Phoenix, Las Vegas and the Inland Empire. One market that has been steady and strong for us and for our clients is greater Chicago. Our New York practice continues to grow and with this market is feeding new retail concepts.

SCB: Who is taking your former position as head of the company’s capital markets division?

Buono: Bob Burke is replacing me in that role. Bob and I will continue to work together on the investment sales of retail. That collaboration underscores we approach our retail practice. Within our retail group, there is the investment side, brokerage, asset services and mortgage banking. One of the strengths of our firm is that we are fully integrated. Whether you are selling the center, recapitalizing it, leasing, managing or repositioning it, that’s what we do. On the occupier side, clients can scale our services to include strategy, supply chain distribution, corporate services and store acquisition or disposition.

SCB: How is your organization set up? Who is helping you carry out all these abilities?

Buono: I am the apex of the umbrella, for lack of a better definition. Todd Caruso, based in Chicago, and Scott Kaplan, located in California, run our landlord practice nationally. On September 1, 2006, Michael McDonald, a former senior executive from IKEA, joined CBRE to be responsible for our occupier business in the Americas. Our occupier practice has also been strengthened by adding key geographically based teams that are fully dedicated to occupier services. This core group works closely with Michael McDonald to assist clients with multi market needs. Remember, however, we are a bottom-up organization and underneath these leaders are approximately 500 retail professionals that execute our entire business. In terms of my role, I have a counterpart in London, Malcolm Dagleish, who is in charge of Europe, the Middle East and Africa. We also have a retail head in Beijing, Bryn Davies, who runs the Asia Pacific region for us. The three of us are the collaborative leaders for CBRE’s retail practice worldwide.

SCB: How is your platform set up to work worldwide?

Buono: One good example is Mattel’s American Girl Store. Mattel has engaged CBRE to roll out their retail concept in the U.S. and we are now working to assist in selecting locations in Asia and Europe for their brands. This is an example of one good client that has found a fully integrated global retail platform. Because my counterparts collaborate with my team, we are able to mobilize and coordinate our services without barriers. Our Europe and Asia offices understand how American occupiers require execution and conversely, we collaborate on retail trends occurring from Europe to the Americas every day.