Northmarq to Buy Stan Johnson Co.

Jeffrey Weidell, CEO, Northmarq. Photo courtesy of Northmarq

Capital markets platform Northmarq has set its sights on Stan Johnson Co., a national commercial brokerage and advisory firm. The company entered into a definitive agreement to purchase the Midwest-based firm, along with its affiliate debt services company, Four Pillars Capital Markets. Pending regulatory approval, the sale is expected to close in October.

The deal will double Northmarq’s broker headcount to nearly 1,000 professionals and help further establish it as a full-service investment sales and capital markets platform, according to prepared statements by CEO Jeffrey Weidell. Northmarq will expand its offering of investment sales, debt and equity financing, loan servicing and fund management operations.

Stan Johnson Co.’s expertise will help diversify Northmarq’s services capabilities across all major commercial asset classes. The acquisition will especially help with the company’s reach in the retail, industrial, self storage, health-care and office sectors, as well as corporate operations. Stan Johnson Co.’s focus on net lease investment sales would potentially allow clients to tap into assets that provide a safer outcome in the face of record-high inflation and post-pandemic fears of a recession.

READ ALSO: Industrial Outdoor Storage Is the New Hot CRE Type

“There is a strong argument to be made that diversification lowers risk in the long run. While the multifamily sector has been the most active of all commercial real estate sectors for the last 10 years, that has not always been the case,” Trever Koskovich, Northmarq’s president of investment sales, told Commercial Property Executive. “By adding other asset classes to our transaction mix, Northmarq will look forward to steadily increasing revenues across multiple product types. Being a full-service brokerage also enables Northmarq to better serve its clients who operate in multiple sectors. When the Stan Johnson Co. offering came our way, we immediately recognized it as a good fit.”

According to a recent report by JLL, this year’s net lease transactions volume surpassed 2021’s performance during the first half of the year. Through June, $32.8 billion in single-tenant office, industrial and retail sectors transactions were generated, a 7 percent increase in volume. The report notes, however, that volume began to slow toward the end of the second quarter in reaction to higher interest rates.

Northmarq’s expansion into investment sales started in 2018 and was initially focused on multifamily. The company plans to expand into all markets where it currently offers debt, equity and loan servicing. Prior to the Stan Johnson Co. deal, Northmarq had 22 investment sales offices across 13 states.

Stan Johnson Co.’s footprint expanded from its Tulsa, Okla., headquarters and, during four decades of service, it closed nearly 7,500 transactions exceeding $45 billion in sales volume. It now has 16 offices across 10 states—Oklahoma, Arizona, California, Colorado, Georgia, Illinois, New York, Ohio, Oregon and Texas.

With each firm bringing leadership in distinct business areas, the deal is being viewed in the industry as complementary and providing Northmarq with a stronger end-to-end investment sales platform.

“It is a perfect combination,” Jonathan Hipp, head of the U.S. net lease group at Avison Young, told CPE.

Hipp also noted the two cultures are a good match because the companies have similar ownership structures. Since 1999, Northmarq has been owned by the Pohlad family. Stan Johnson Co. was founded 40 years ago by Stan Johnson. He is still CEO today.

Boulder Group President Blankstein said that the timing of the acquisition is interesting since net lease volume is likely drop off some in the higher-rate environment. Nonetheless, he believes the merger has a better chance of success than most over the long-run.

“The net lease investment sales market is largely divided between large national firms and narrowly focused independent boutique companies,” Blankstein said. “Stan Johnson was an anomaly as they were solidly in the middle of both sides but likely had a long path forward to become a top tier national player.”