KLNB, the Mid-Atlantic region’s largest privately held CRE brokerage firm, has announced the acquisition of Edge Commercial Real Estate, the 16-year-old Rockville, Md.-based brokerage with offices in Maryland, Virginia, and Washington, D.C.. The deal allows KLNB to establish a greater presence in Montgomery County, something KLNB has been eager to do.
Per the press release: The deal will increase KLNB’s size by roughly 20%, adding 32 total employees, 18 of which are brokers who specialize in multiple facets of office, industrial, tenant representation, and multi-family investment sales and leasing. Six of the brokers will be immediately installed as principal partners at KLNB. The official financial details of the acquisition have not been disclosed, but the transaction includes substantially all of Edge’s assets.
The acquisition of Edge instantly delivers significant advantages for KLNB’s office and industrial tenant rep components, a specialty that is responsible for two-thirds of Edge’s revenue. KLNB has been looking to build this area of its business, and Edge’s six-person team, focused solely on tenant representation, allows KLNB to inject a sizeable team of experts, all at once.
This acquisition also provides KLNB with an immediate opportunity to expand into the multi-family market, another pillar KLNB had been looking to create. Edge is known throughout the DMV as a leader in multi-family real estate with $9.5 billion in Mid-Atlantic sales and a 99% closing ratio on listings. Their multi-family services include seller and buyer representation, office-to-residential conversions, adaptive reuse, and land and development site assessment. With an impressive regional portfolio of over one million square feet of property management and engineering assignments, KLNB’s property management portfolio will also increase, with Edge’s group folding into KLNB Asset Services, a joint venture between KLNB and Divaris Real Estate.
Lastly, the deal allows KLNB to establish a greater presence in Montgomery County, something KLNB has been eager to do. Edge’s Rockville, Md. location makes that possible and gives KLNB its fifth office in the DMV.
“The acquisition of Edge fits perfectly in our timeline for smart and disciplined progression,” says KLNB President Marc Menick. “Our evolution has always been calculated to ensure it makes sense for our team and our clients. By acquiring Edge, we will be able to do virtually everything we’re already known for, but at an even higher level and a wider reach. And in the case of multi-family, this opportunity brings the KLNB customer experience to a whole new sector that we have wanted to approach for some time.”
But ultimately, it was the seamless cultural fit of the two firms that made the deal most attractive. Menick says that leadership from both teams had discussed the possibility of an acquisition on several occasions since 2018, realizing both brokerages share similar cultural traits and a mutual professional respect. Then, in late 2021, when Edge Founder and Managing Partner Joe Sutton announced he was leaving the firm, the timing became perfect for the two companies to turn mere discussions into reality.
“In many ways KLNB is the firm that Edge was already starting to become,” says current Edge Partner, and future KLNB Partner, Marc Balamaci. “The discussions that we had with Marc [Menick] and his team over the last few years made it clear that KLNB was a natural fit and offered a truly mutual benefit across all of our disciplines.”
The acquisition comes on the heels of both KLNB and Edge having their best years ever in 2022. KLNB reported $1.8 billion in transaction volume and 1,170 total transactions, an increase of 3.3% and 11% over 2021, respectively. This gives KLNB three record-setting years since 2019. For Edge, 2022 saw $492MM in transaction volume and 231 total transactions.
The success of both brokerages showcases two firms that offer steady and impressive patterns of growth, despite challenging economic conditions brought on by the pandemic and rising interest rates. That success, together with the terrific cultural match of the firms, and KLNB’s clear path for professional development and promotion, gave Edge’s leadership team every confidence that being acquired by KLNB was the right decision.
“KLNB’s reputation in the market is outstanding, both as thought leaders in commercial real estate, and for their focus on customer dedication,” says Sutton. “Though I am departing the company, this will be a fantastic opportunity for the Edge team. Joining KLNB will give them a clear new path for professional development, and the ability to work with a firm that offers the same level of service and reach as the largest commercial brokerages but retains the close-knit culture that Edge has also been known for.”