Bradley Kowit and Steven Passov founded Kowit & Passov Real Estate Group five years ago to serve the local retail real estate market. It's a strategy that has served them well.
But as the venture grew, eventually making Kowit & Passov the largest retail brokerage firm in the Cleveland area, customers started requesting more than the pair was capable of delivering.
Passov says he and Kowit found themselves standing at an unfamiliar crossroads. It's the type of crossroads small business owners must face when their companies grow beyond their original intent. There are many "boutique" firms that serve specific market areas, but their owners can't just wake up one day and shift around their expertise to make their respective companies dominant players on all fronts.
Kowit's answer: a merger.
K&P was looking to expand its services; crosstown giant Collier's International wanted to strengthen its local retail reach. It was a match made in real estate heaven.
Says Kowit, "The changing face of the retail real estate market -- with national firms targeting the local market and businesses looking to employ one company for all their real estate and property management needs -- was a significant factor in our decision to merge with a larger firm. We saw a national company with strong local roots that we'd able to blend into and take advantage of."
The merger gives K&P access to Collier's International's 245 offices in 52 countries, while adding a local feel to Collier's.
"The addition of Kowit & Passov strengthens our presence and service offering," says Dennis Burnside, executive managing director of the Cleveland office of Collier's.
So while the Collier's International name and logo replace Kowit and Passov on the business cards and signage, the things that made the smaller company unique will be retained, Passov says.
"We saw the need to attach with someone who had a first class organization that would still allow us to do what we do," he says.
As a whole, Collier's, Burnside admits, was not particularly effective when it came to retail space. The move gives the company expertise it never had in a local market.
And, it wasn't unusual for a regional broker -- someone who might be covering 15 states -- to be shunned by the local market, Burnside says. The merger not only lowers the overhead, it also it provides the company with brokers who focus their attention locally, where they have better information about their customers, and, in turn, can better serve them.
There are other benefits as well.
Three or four companies did 80 percent of the retail real estate work in the area, and Cleveland never had a full-service firm that did retail work. Now it does. The former Kowit & Passov can offer appraisal services and other benefits for which it didn't have the capacity by itself. And, of course, the merger gives K&P access to other markets and exposure to many more clients.
Finding a way for both organizations to gain was the ultimate goal.
"They didn't have to do this and neither did we," Kowit says. "So far, so great. It's better than we thought. We still do what we do." How to reach: Collier's International/Kowit & Passov, (216) 861-5413
Daniel G. Jacobs (email@example.com) is senior editor of SBN.