PM Realty Group Quietly Expands
PM Realty Group has evolved its business from solely a property management firm to include other services in recent years, and it's not stopping there.
Randall Shearin

PM Realty Group manages Crossroads Shopping Center in Kailua-Kona, Hawaii.

Today, the 51-year-old firm is concentrating on developing its investment sales division. PM Realty Group generates 42 percent of its revenue from its investment sales and leasing services.   Other activities like leasing and management services, construction management services, due diligence preparation and a small third-party development business garner the balance of the company's revenues. The company has offices in New York, Washington, D.C., Atlanta, Orlando, Texas, Arizona, Colorado, California and Hawaii. Clients include large institutional investors like Prudential Real Estate and Wells Real Estate Funds. One recent assignment for the company was the management contract for a portfolio from American Realty Advisors. PM is managing the company's 4 million-square-foot Southern California portfolio. PM Realty Group's portfolio is valued at more than $25 billion and encompasses 140 million square feet of space.

PM Realty Group is active across all property types. Different offices specialize in different property types.

One growing geographic area for the company has been the company's western region, which encompasses Arizona, Nevada, California and Hawaii. These growing states have meant a growing presence for PM Realty in recent years. Hawaii, in particular, is one market where PM Realty has made its presence known. PM Realty Group has been active in Hawaii for a number of years, and it has developed its practice there into one of the top retail brokerages in the state.

“Because Hawaii is such a small market, we end up doing a little bit of everything,” says Jim Proehl, executive vice president and managing director of the company's western region. “We represent tenants and landlords in the market. We also do investment sales and we work on retail, office and industrial properties.”

PM Realty Group represents a number of retailers in the state. It represents Chevron, Cold Stone Creamery, Safeway, Ruth's Chris Steakhouse and Macaroni Grill, among many others.

The company has recently added to its capabilities in the Texas market, increasing the size of its Dallas office. It has added a number of people to its Dallas office, increasing the firm's retail presence in the city.

“Since we are headquartered in Houston, we are fairly well known in the Texas market,” says Proehl. “We have a strong transactional presence in the market, both in Houston and Dallas. From an investment perspective, the investment team saw this as a great platform to expand our presence in the market because of our central location.”

PM Realty is also adding to its presence in Southern California. It has recently added more professionals to the staff there and the company continues to add listings in the office, multifamily and retail categories.

“We've really tried to focus on our clients,” says Proehl. “We want to represent our clients both on the investment sales and purchase side. Our biggest challenge is the volume of sales right now.”

Proehl reports that PM Realty rarely loses any business that it has the opportunity to keep. In other words, most of the time that the company loses a property, it is because a client sells a property to a firm that has in-house management and leasing capabilities. PM Realty's clients often lead to more growth. As the client expands or acquires new properties, it hires PM to manage them.

One advantage that PM Realty Group has in investment sales is that the company also manages properties.

“When you actually run an asset you learn the ins and outs of a property,” says Proehl. “You learn the physical attributes and the intricacies of the asset. That's a benefit in today's market, when there's so much money out there chasing deals. You really have to understand the asset to be able to position it properly.”

An opportunity that Proehl sees for PM Realty Group is for the company to expand its development business. PM has never been an owner of properties, but it has done some third-party development work on behalf of its clients in specific markets. Proehl thinks that PM Realty Group would make a good joint venture partner for some of its clients. The company could also expand its capabilities as a merchant developer. The company has been most active on this front in the Texas market.

“There are a lot more institutional clients that are willing to venture with companies,” says Proehl. “We have some opportunities with our clients, but we want to be careful in entering them. We don't want to compete with our clients.”