Tampa CRE boutique firm says time was right to sell itself

About 10 years after John Fahey and Tyler McRae launched their boutique commercial real estate firm Meridian Retail Group in Tampa, the partners decided to sell it to one of their competitors — a national company with deep ties and pockets.

Before you start thinking of this is as a "if you can’t beat ‘em, join ‘em" kind of deal, stop. This was nothing like that.

Meridian, which has had numerous opportunities to sell itself in the past, had partnered on both sides of transactions with the competitor, Dallas-based SRS Real Estate, for years. So when an opportunity presented itself, what Fahey, 50, and McRae, 41, saw was a national firm with sensibilities that aligned with theirs, a firm with as common a sense of purpose as theirs and a firm that that could help them grow in the business.

In other words, they saw an opportunity. And they took it.

“Specifically, as we as we looked at the Florida market, and Central Florida in particular, from a retail standpoint, it has been somewhat under serviced. Not necessarily from a brokerage standpoint, but just not enough retail space for the demand that's out there and for the population that's out there,” says Fahey.

“So I think it was a great opportunity for us to really, quickly, broaden our abilities and platform with joining SRS. SRS has had a presence in Florida for going on 20 years and has been (an) absolutely top of the class player in the market. And we're just here to help augment that.”

The deal

SRS announced the purchase of Meridian in early June without disclosing the details of the deal. As part of the agreement, all five of the brokers working at the Tampa firm, including the founders, moved to SRS’s existing office on Kennedy Boulevard in the city, more than doubling the Dallas company's local presence.

Fahey and McRae were named senior vice presidents and market leaders and are leading the local office with John Artope, SRS’s executive vice president and managing principal.

But the deal wasn’t all about what Meridian got out of it.

SRS picked up a firm that, while a boutique, brings with it a solid book of business. Among Meridian’s specialties are site selection, tenant representation and lease negotiations for a client roster that includes PDQ, Buddy Brew Coffee, Beachside Hospitality Group and Glory Days Grill.

Chris Maguire, SRS’s CEO and chairman, says in a statement that given the growth and opportunity it made sense to bring on the “dynamic Florida team.”

The company, he says, “continues to invest in our business and expand throughout the country as we see accretive opportunities.”

SRS was founded in 1986 and has 28 offices, including in Orlando and Fort Lauderdale.

The team

Fahey and McRae’s partnership started long before Meridian.

The two first worked together at Calusa Asset Partners. Fahey says they were “passive partners” at the firm, which worked across several commercial industry sectors. They, however, liked the retail side of the business and after some time decided to go out on their own.

“I feel like we executed at a high level but there was just was not a lot of business that we that we wanted to continue on,” Fahey says. “And so when we split from our partners at that time, we decided to really focus specifically on tenant rep and then also some owner rep with regard to leasing and disposition of different retail real estate.”

Over the next 10 years, they built a firm that grew to five brokers. (SRS officials declines to would not share revenue for itself or Meridian.)

Fahey says the firm’s success came from its relationship with clients and being able to help them grow in Florida. This allowed Meridian to broaden its client roster over the years, beyond the solid base it began with. As it grew, it brought on the additional brokers who contributed, helping bring in new business.

Yet, it never moved far from its roots as a small and efficient boutique firm.

“It went from, really, just Tyler and I as the as the partners and the bottle washers to a group of five,” Fahey says. “We, in very much the boutique model, ran very lean. Everyone rolled up their sleeves and got involved, whether it was building their own tour books, pulling all their own demographic data… All of those things we were really doing in house. And it was actual brokers doing the work. Whether it was Tyler, myself or the younger broker associates that we had on our team.”

One of the advantages of moving in with SRS is that the team now has the data and support services that come with a national firm. Chief among those benefits is access to technology.

SRS, Fahey says, is a leader in the deployment of technology, specifically analytics-based technologies to assist clients. Having these additional tools, coupled with the support services, allows the former Meridian brokers to broaden their scope and expand their client bases, he says.

The timing

One other point that is important to note. The decision two sell wasn’t a quick one nor was it one born of necessity.

SRS and Meridian first talked about coming together five years ago, before a pandemic and massive population shifts became the topic du jour. But the timing wasn’t right initially and then the focus changed to surviving and coming out of the pandemic.

By the spring of this year, though, things changed and the “timing just really, really felt right,” Fahey says. And when the time came, despite several other groups that over the years made “aggressive overtures towards us,” Fahey and McRae say SRS was the right firm for them to sell to and become a part of.

“That trust and familiarity, and that common sense of focus and passion for retail real estate," Fahey says, "was always evident.”