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GOING NATIONAL

Chain Links president sees new era in retail brokerage

Of all the professionals tapped to head a nationwide network of retail brokers, Troy Peple may not have been the last choice, but he certainly wouldn’t have been the first to come to mind: He’s not a broker, nor does he have a background in retail. Yet in 1999, the 37-year-old CPA and former management consultant was named president of Chain Links, the Vienna, Va.-based retail-only broker network.

Shortly afterward, what had been a relatively loose association of brokerages around the United States was incorporated and streamlined into a private corporation charged with providing real estate services to such clients as Starbucks and Target — even if that means going outside Chain Links’ own membership network. Peple spoke with SCT Editor-at-Large Debra Hazel about the changes at his company, in brokerage and the industry overall.

Why did Chain Links want to go from a network of local brokers to a national company?
As you’re seeing continued rapid expansion by national retailers at an unprecedented rate, you’re also seeing a rapid surge of people wanting to provide national services to those retailers. So these dominant local firms were beginning to be threatened by these national firms because they would get the business for the whole country.

But Chain Links had a national reputation.
But not the national service delivery capability. Chain Links was originally not organized to have one guy in a city manage all those offices on behalf of a client; that was what was lacking in their structure.

So what was the first thing you did to make the change?
The first thing we did was to form a new private company, raise capital and eliminate the old network structure. The second step was to make Chain Links absolutely free to use any local company in any market it feels would best serve a given client. There is no obligation for anyone in my office to work with a Chain Links company in a city. The other thing is that Chain Links is free to change its local offices. They get renewed and reviewed every two years, and if they're not one of the top service providers, we’ll change to someone who is.

You’ve also started forming alliances, such as with MyShoppingCenter.com. What's the rationale behind that?
We are the national exclusive partner for MyShoppingCenter.com. What we do for them and for our landlords is bring broadband connectivity into the shopping centers. [MyShoppingCenter.com] would have spent years in training, hiring and sending their sales force all across the country to meet with a bunch of landlords they don’t know. Here we are, 350 strong, already in those markets with relationships with every single landlord. What a tremendous opportunity for us both.

What are some of the other alliances you’ve formed?
A perfect example is our relationship with [disposition firm] DJM [Realty Services] … a subsidiary of Gordon Bros. out of Boston, specializing in national large-scale dispositions and excess retail property. One of their needs is to be able to evaluate these properties very quickly … To have 350 partners who live and breathe that market, and can in 30 seconds tell you stuff it would take you a month to learn on your own, is a huge value to them. … They bring national expertise, tremendous experience in large-scale lease terminations and bankruptcies; they bring a national perspective and national marketing effort. We bring all the expertise, the knowledge and the market intelligence, and the ability to execute on a portfolio once they get it.

What really attracted me to the relationship was the access to Gordon Bros.’ financial resources. We can approach the retailer who wants or needs to get rid of a large number of properties and write them a check up front for $100 million, $500 million, $700 million, up front against our performance on getting rid of that portfolio. Imagine what an option that is to a retailer faced with closing a lot of locations.

Do brokerage deals differ from the syndications you dealt with in your previous career?
I think a real estate deal often is much simpler than a merger or acquisition is. It’s a narrower range of issues, but generally, a deal is a deal. The reason I agreed to take over Chain Links is the fact that it was solely retail. If it had been in office or industrial, I would have declined, because the nature of those businesses doesn’t require the local knowledge or relationships that retail does. I don’t think retail brokerage will ever become a commodity. The number of variables that determine whether you can use a retail space is extraordinary. You can’t divorce the advice you’re getting from your local broker from the closing of the transaction. … You’re sitting in Minneapolis and you want space in Dallas, so you’re going to look at the local listing service for Dallas. [But] you have to hire somebody to tell you what the deal should be, if the space works for you, if somebody is building a competing center across the street that will have other uses, other tenants that will compete with you. You can’t eliminate the broker from the transaction.

The spaces you really want aren’t going to be on the multiple listing services because probably the valuable space that really is going to work for you has somebody in there right now, and you’re not going to know he only has a year left on his lease. Our guys who ‘live’ that market know that. The majority of deals our guys do for their clients are not putting them into space; it's putting them into space that is going to be. And that’s what I think really separates retail, and that's why I think the retail brokerage area is going to continue to provide value.

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