Hoff & Leigh, a commercial real estate firm, made a name for itself in Colorado Springs by moving a high number of low-dollar transactions. Now the company is making plans to take that business model nationwide.
Hoff & Leigh opened its doors in Colorado Springs in 1987 with a strict approach to the high/low business model. The strategy worked so well over the years that its executives wondered if the same approach might work in other markets.
About a year ago, the company tested the notion and expanded into Akron, Ohio. The model has worked so well there that it is now crafting plans to move into other states.
The company is finalizing the details for its expansion and expects to sign affiliates, almost like franchisors, by the beginning of the year.
Firm President RD Trinidad, who is the son-in-law of founding partner Tim Leigh, offered few details about locations but said Hoff & Leigh will sell the use of its name and expertise for an annual licensing fee of between $6,000 and $10,000 per agent.
The focus will be in markets that look a lot like Colorado Springs, where there’s a wealth of tertiary commercial properties.
It’s a franchise model that makes sense to Chuck Dannis, a Dallas-based real estate consultant who tracks national real estate trends and teaches at Southern Methodist University’s business school.
National firms typically won’t touch small commercial properties because they cannot market them outside of the local area, he said. The only competition a national firm specializing in small commercial properties would face is from residential real estate brokers who pick up the small commercial properties in their area.
And Hoff & Leigh already goes after those.
“The transactions might be smaller, but we do more of them, which creates a steady cash flow model,” said Broker Associate Holly Trinidad, Leigh’s daughter.
Holly and RD have spent the past two years working on technology needed to duplicate the business model in other cities.
The two aren’t fazed by the idea of expanding while the economy is still suffering.
The people hit the hardest in the commercial real estate industry are those with national tenants or institutional investors, RD said.
“The mom-and-pops are still moving,” he said. “They are still doing transactions.”