As Amazon has built up the largest portfolio of industrial real estate of any company in the U.S. over the past few years, it has had a silent partner negotiating deals for it every step of the way: Seattle-based real estate services firm KBC Advisors.
But KBC, which was founded in 2016, is no longer just a handful of deal-makers working out of a WeWork near Amazon’s South Lake Union headquarters, quietly tasked with growing the e-commerce giant's distribution network. The secretive firm has hired scores of high-level real estate professionals across the country, signaling that its ambitions are to become something much greater than just Amazon’s broker of choice.
Five years ago, KBC had a headcount of roughly a dozen people based in one city, but today it has more than 130 employees. It has hired more than 115 people since the start of 2019 alone, according to a Bisnow analysis of employee LinkedIn pages. It opened offices in Atlanta, Dallas and Nashville in 2020, sources told Bisnow, before launching four new outfits last year alone: in New Jersey, Chicago, Phoenix and San Francisco.
Over the last three years, it has hired at least 18 people from CBRE, 13 people from Cushman & Wakefield and 11 people from JLL. Many of the hires were high-level brokers or executives at their previous firms, including CBRE’s Philadelphia market leader, an Avison Young principal, a Cushman & Wakefield executive managing director and a JLL executive vice president.
The company’s growth has been fueled by the rapid expansion of Amazon’s logistics network. The tech giant leases more than 280M SF of industrial space across North America, and industrial brokers and developers say KBC is typically involved any time Amazon builds or leases a warehouse.
“The first call you make when you have a new project is Amazon,” said an industrial broker at a national firm who requested anonymity to talk about the e-commerce giant. “Except when you call Amazon, you get KBC.”
But having the sector’s largest tenant as its client appears to no longer be enough for KBC. Recent hires and property listings indicate that the company is adding new clients and business lines, which could become critical to sustaining KBC’s growth — its cash cow is getting set to slow down.
Amazon will start to “moderate” its physical warehouse investments, Chief Financial Officer Brian Olsavsky said on an earnings call last week, a move it says matches the slowing pace of growth of the underlying business.
“KBC is at the mercy of Amazon’s decisions. So if they’re not doing deals, and if you own KBC, wouldn’t you start looking at other stuff, too?” said a source who has done business with KBC and spoke on the condition of anonymity. “I think KBC is also always going to have Amazon’s business, but I think to be at the mercy of one client, I think they want to get ahead of it if things slow down or change.”
Bisnow spoke to 11 industrial market sources for this story, including brokers and developers across the country. Many of them chose to remain anonymous due to the sensitive nature of working with Amazon, which often requires confidentiality agreements from its partners on real estate deals.
Bisnow also reached out to more than two dozen KBC employees who have joined the firm over the last three years, but none agreed to participate in an interview. A KBC executive who runs the firm’s communications efforts declined to comment for this story.
The company doesn’t appear to have ever spoken publicly about its growth strategy, but its website sheds some light on its philosophy.
“Many people remark how KBC is uncommonly different,” the firm’s Careers page reads. “We’re proud of that. Long ago, we traded bureaucracy for something much better. The chance to disrupt and revolutionize an industry.”
Industrial professionals have held largely positive views of KBC and its presence in the market, given that the firm helped developers and their brokers land Amazon and the reliable revenue and increased value that comes with having the tech giant as a tenant. But that could change as KBC expands more into other business lines and begins competing more with other brokerage firms for talent and deals.
“They could become a force in the industry,” a prominent industrial developer told Bisnow. “KBC is leaning toward becoming a full brokerage company who does all the services. Basically in competition to CBRE, JLL and the others.”
Inside KBC’s Growth
KBC was founded in 2016 by John Hanson and Todd Meldahl, but the duo had been working on Amazon’s industrial real estate strategy long before launching the firm.
The relationship between the brokers and the tech giant began in the late 1990s when Hanson was at CBRE and one of his colleagues at the firm, Rick Diedrich, left to join Amazon, Insider reported last month. Diedrich then brought on Hanson to help scale up the company’s industrial footprint.
Hanson maintained Amazon as a client through the 2000s as he left CBRE to work for Trammell Crow and then Cushman & Wakefield, according to a 2017 report by the Puget Sound Business Journal. Meldahl joined Hanson’s team at C&W in 2007, and the two then left to launch KBC in 2016. They were joined by several other C&W colleagues, and as of September 2017, KBC had 13 employees operating out of a WeWork near Amazon’s headquarters, the PSBJ reported at the time.
But the assignment of expanding Amazon’s industrial real estate footprint has for years been a rapidly growing job. The e-commerce giant added 100M SF of logistics space in 2020 alone to bring its portfolio to 285M SF across North America. It doubled its spending on its network last year, it said in its earnings report last week, outlaying $30B between leases and build-to-suit developments.
Amazon controls more than twice as much warehouse space as its closest competitor, Walmart, according to CoStar. Behind all of that growth is KBC, development sources who spoke to Bisnow confirmed — it is involved in virtually all of Amazon’s logistics deals, negotiating for leases, developments and acquisitions on behalf of the behemoth.
“They do every single industrial deal with Amazon throughout the country and Canada,” said a source who has done business with KBC. The source added that KBC even has dedicated brokers who lease parking lots for Amazon’s delivery vehicles. “There’s not a deal that would go by that they’re not involved.”
You would hardly know it if you were tracking Amazon’s deals in the press.
KBC’s name has been mentioned publicly on Amazon deals in only a handful of instances: It was connected to Amazon’s 1M SF lease at DFW Commerce Center in Dallas, a 250K SF lease at Victoria Station in Sonoma, California, and a 125K SF lease in Loveland, Colorado, all in 2020, as well as Amazon’s 470K SF lease at Lakewood Logistics Center II in Colorado last year.
“They’re sort of like the Keyser Söze of real estate right now. When Amazon comes to a market, no one dares say it’s an Amazon deal because they’ve got heavy nondisclosures,” said MK Asset Management principal Hugh Williams, a Chicago-based industrial broker. “Everyone knows it’s an Amazon deal. It’s a very interesting thing that when Amazon is doing a deal, people know it’s Amazon, but they’re not allowed to say the name. I think there’s a fear of Amazon in some ways.”
In cities where KBC doesn’t have on-the-ground staff, the secretive firm will partner with local brokers, multiple sources said. Industry insiders say the finger-to-lips approach has to do with the level of intelligence KBC has from working with the biggest occupier in the industry, which also happens to be a notoriously data-driven company.
“They likely don’t want to tout what they’re up to because they are operating ahead of the curve, so they do fly below the radar,” said Chesapeake Real Estate Group principal Matt Laraway, a Maryland industrial developer who said he has worked with KBC on around five deals. “When they come to work with us, they’re usually several steps ahead of their competition, more well-informed and ready to go.”
KBC’s Hiring Spree
As Amazon’s logistics network has grown exponentially in the last three years, so has its industrial broker of choice.
Five years after it had roughly a dozen staffers, KBC’s website lists 126 employees on its “team” page. Insider reported its headcount has reached 160 people as of last month, and a Bisnow review of LinkedIn pages found that more than 130 people list KBC as their employer on LinkedIn, 117 of whom have joined the company since the start of 2019.
The hiring binge has happened stealthily over the last three years — KBC doesn’t issue press releases with announcements of major hires, which is common practice at other brokerage firms.
These new employees have come to KBC with a variety of specialties, including leasing, acquisitions, debt origination, data research, valuation, accounting, property conversions and geographic information systems mapping, according to their LinkedIn profiles.
“They're out in the marketplace and they're trying to steal as many brokers as possible,” said an industrial broker at a firm that has seen multiple departures to KBC. “They're poaching people left and right. And to be totally honest, I don't understand what even their business model is going to be. And I don't know if they're quite clear yet.”
Many of these hires have come from the nation’s three largest commercial real estate services firms.
CBRE has lost 18 people to KBC since the start of 2019, including high-level professionals such as Adam Mullen, the firm’s former Philadelphia market leader, and Ryan Keiser, a former Dallas-based executive vice president.
Cushman & Wakefield has lost 13 people to KBC since the start of 2019, including a four-person New Jersey-based leasing team — former Executive Managing Director Jason Goldman, Executive Managing Director Marc Petrella, Managing Director Michael Kimmell and Director Andrew Siemsen — plus former Southern California-based Senior Director Ryan Bos.
JLL has lost 11 people to KBC since the start of 2019, including former Nashville-based Executive Vice President Bo Fulk, former managing director and Western U.S. head of industrial capital markets Bo Mills and former Los Angeles-based Managing Director Tony Muscio (who was in JLL’s hotels group).
CBRE, Cushman & Wakefield and JLL all declined to comment on the departures.
KBC’s hires have been focused around its headquarters and the largest industrial markets in the country over the last three years, according to employee LinkedIn pages. It has hired 50 people in Seattle, 14 in Dallas, nine in Atlanta, seven in Los Angeles and six each in New Jersey and Nashville.
“They’ve picked up some of the best professionals in the country,” Laraway said. “They have attracted best-in-class talent, market-to-market.”
Bisnow spoke with two industrial brokers in different parts of the U.S. who have been approached over the past three years to work at KBC. The firm pitched to one of them the depth and richness of its data compared to global brokerage firms, and data quality is a big factor for brokers in considering places of employment, the broker said.
“These big firms, the JLL, the CBs, are constantly touting their big data,” the broker said. “I think [KBC is] well aware of how important that is to brokers.”
KBC’s ability to hire top-level talent away from the largest firms in commercial real estate signals to some industry insiders that it is offering generous compensation packages. The brokers who had discussions about working for KBC said the conversations were preliminary and compensation wasn’t discussed.
“I can tell you there’s no executive managing director from a big firm who’s going to go from one firm to another without significant financial upside, they just don’t do it,” Williams said. “So that alone tells me that there’s got to be a compensation model there that’s unique, because it’s hard to get a group of people like that to leave.”
But even brokers working for firms that have been harvested by KBC and have seen their industry bend to Amazon’s will said they have had positive interactions with the brokerage firm.
“They’re great guys, those KBC guys. They treated me overly fair,” Cushman & Wakefield Senior Director Gordon Benedict told Bisnow. “I think you’ll be hard-pressed to find anybody that says anything bad about them.”
‘Are They Competitors Or Are They Friends?’
There are more than 120,000 commercial real estate outfits in the U.S. with a combined annual revenue of $112B, according to research firm Dun & Bradstreet. But there are few built like KBC.
“I don't know anyone [who] can look at the landscape and say, ‘You know what the market needs? Another brokerage firm,’” one Southeast-based broker said. “But they have Amazon in their back pocket.”
KBC is one of a few industrial-focused brokerage shops with national reach, and its access to Amazon’s wealth of data could give it an edge in a crowded competitive market if it wants it.
“They have talent. Having that client as your customer is such a big hammer,” one landlord told Bisnow. “Everybody wants to do business with them. A lot of the big landlords are going to give you listings because they’re going to want to be in your good graces.”
KBC’s run of notable hires has many speculating about the future of the Seattle firm, and whether that future will remain tied to Amazon. Many of the brokers KBC has hired have books of business and years of relationships they brought with them.
“I think when you build your business, I don’t want to say on the back of, but in relationship with one client, one of the things it does is it gives you confidence,” said Wendy Berger, the CEO of Chicago-based industrial developer WBS Equities.
Berger founded WBS in 2004 developing food storage facilities for Arbor Investments. Her business has diversified since then, although Arbor still accounts for some 70% of WBS revenue. While Berger said she is unfamiliar with KBC, it makes sense that the firm would look to add other customers outside of Amazon.
“Maybe [KBC is] saying they know they've had this amazing momentum, now we need to build off of it,” she said. “When you build your business on one client, you're not focused on the external factors, you're focused on your client.”
On its website, KBC lists four main lines of business: capital markets, agency leasing, tenant representation and site selection. It has beefed up each of these divisions with its wave of hires.
The firm has a property listings page, where it highlights industrial properties that KBC brokers are marketing for lease across the country. The page features 59 total listings across the U.S., including 28 in the Seattle market, 10 around San Francisco, 10 in New York and New Jersey, and six near Nashville.
It is marketing buildings for national landlords, many of whom have leased millions of square feet to Amazon, including Prologis, Black Creek Group, Principal, Nicola Wealth Management, Duke Realty, Velocis and CenterPoint Properties.
“They’re seeing every single site around the country, and Amazon’s not taking every single site, so why not approach that owner and try to lease it for them?” said a source who has done business with KBC.
“They are doing more deals with all these national industrial companies — Panattoni, Seefried, Ryan, Hillwood — these guys are doing so many deals with them, it’s like why not start an agency leasing and go rep Panattoni or Ryan? They’re doing so many deals with those guys, those guys need to hire brokers as well. So it’s a perfect marriage.”
In at least a handful of publicly reported projects, KBC was engaged in real estate deals that didn’t involve Amazon. The firm filed permits last year to begin construction on a $1.5M, 350K SF warehouse in DeSoto, Texas, according to the Dallas Morning News. In December, KBC's Goldman and Himmel — two former C&W brokers — helped sell a 13,500 SF warehouse in New Jersey to an epoxy company.
KBC has infused itself with both capital markets and development acumen in the past couple of years. Multiple sources noted that KBC’s hire of Mills, the former JLL leader, as its president of capital markets suggests KBC is aggressively looking to list more just than Amazon-leased warehouses.
“Are they trying to become a national brokerage firm? We’ve seen them ask for listings. Been told they’re doing brokerage work for other people,” one Mid-Atlantic industrial developer said. "Are they trying to create an independent brokerage shop that handles not only Amazon but everything else? Or are they trying to milk this for everything they can?"
The skill sets KBC has acquired along with its access to a treasure trove of site selection and real estate data amassed by Amazon over the years means the firm “could become a force in the industry” someday soon, one national developer told Bisnow.
“I think there are a lot of questions: Are they competitors or are they friends?" a Chicago-area broker said. “I think people are still trying to figure that out.”
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