20 Staffers Bolt L.A. Firm for Rival Realty Brokerage in County
Daum-Johnstown American, a large Los Angeles-based broker of commercial real estate, this week lost 20 brokers and clerical staffers from its Anaheim office to an upstart rival, Orange County’s Scher-Voit Commercial Brokerage Co.
Scher-Voit, meanwhile, issued a press release Friday denying that it had recruited any of the brokers and saying the defection en masse “came as a surprise” and was “unsolicited.”
The coup has been the talk of the local brokerage industry in the past few days. While some brokerages do it, it is generally considered bad etiquette in the industry to aggressively recruit brokers from another company.
“There’s a lot of innuendo going around that we did a sort of takeover in the night,” Scher-Voit President Lawrence M. Scher said.
“But there was no town meeting type of thing where I went out and had an open solicitation of these people.”
Scher-Voit has just opened a small branch office in Anaheim, but will now expand to accommodate all its new brokers, Scher said
The defection followed months of rumors that Daum-Johnstown’s parent, Dallas real estate investment company Southmark Corp., had put the brokerage up for sale.
Southmark--carrying a big load of corporate debt--has put some of its real estate and another subsidiary on the block recently. Southmark tried to sell prestigious Newport Beach home builder J.M. Peters Co. to Denver-based MDC Holdings Inc. early this year, but the sale fell through.
Another rumor had Daum-Johnstown management buying the brokerage from Southmark in a leveraged buyout. In such a buyout, a company’s future earnings are pledged as collateral for the loans used to buy it.
Southmark said Friday that no executives were available in Dallas to answer questions about the brokerage, and Daum-Johnstown executives in Los Angeles referred calls to Dallas.
Daum is an old-line Los Angeles brokerage founded in 1904. It was acquired in 1984 by Johnstown American Cos., which in turn was acquired by Southmark.
Also in 1984, Johnstown American also bought an 8-year-old brokerage that had been founded by Scher, Business Properties Commercial Brokerage. Scher went on to found Scher-Voit last year.
The brokerage now employs about 100 people in the Anaheim branch and in offices in Irvine and La Jolla, most of them sales people from middle-sized local brokerages.
Scher said the mass defection at Daum-Johnstown began this way: Two brokers who had worked with him at Business Properties and then worked for Daum-Johnstown after the acquisition contacted him about working at Scher-Voit.
Scher said he agreed to hire the two, Alan Pekarcik and Robert Socci. Then many other people at Daum-Johnstown’s Anaheim office asked for jobs too.
“They all had a tight, teamwork-type relationship, and before I knew it there were 20 people coming over and wanting to join up,” Scher said.
He said his brokerage’s structure of splitting commissions with brokers is more generous than Daum-Johnstown’s for some brokers.
But Scher said his commissions aren’t out of line with industry averages, which usually start at a 50-50 split between the sales person and the company, then go up in favor of the sales people, depending on how much business they bring in.
Scher’s partner in the new firm is Robert D. Voit, a developer and president of the Voit Cos. He is managing partner for the gigantic Warner Center commercial and industrial park in Woodland Hills.
