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Left to right: Marc Menick, President, KLNB, and Marc Balamaci, Partner, KLNB. Image courtesy of KLNB
KLNB further solidifies its status as the largest privately held commercial real estate brokerage firm in the Mid-Atlantic region with the acquisition of Edge Commercial Real Estate. The transaction allows KLNB, which has been a leader in the Greater Washington, D.C., area since 1968, to expand in size by approximately 20 percent.
KLNB has not disclosed the transaction’s financial terms; however, the deal includes substantially all of Edge’s assets, and Edge is not precisely small potatoes. The Rockville, Md.-based firm opened its doors in 2007, and now boasts a track record that includes leasing and management volume totaling 8.5 million square feet. The firm’s roster of offerings runs the gamut and includes advisory, leasing and investment sales services, as well as construction and engineering services. Additionally, Edge brings to the table a portfolio exceeding 1 million square feet of property management and engineering assignments.
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Edge is folding in with KLNB at a time when both firms are at peak performance, with the companies having each experienced their most successful year in 2022. Edge recorded $492 million in transaction volume and a total of 231 deals, while KLNB logged $1.8 billion in transaction volume and 1,170 deals.
The acquisition of Edge fits in KLNB’s timeline for smart and disciplined progression, Marc Menick, president of KLNB, noted in a prepared statement. “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,” he added. Menick joined the KLNB family in 2017, when he accepted the appointment as president & chief operations officer.
Multi-faceted expansion
With the acquisition of Edge, KLNB increases its office footprint from four to five locations in Washington, D.C., Maryland and Virginia, and adds 32 employees, including former Edge partner Marc Balamaci, who comes to KLNB as a partner. The transaction also allows KLNB to substantially enhance its office and industrial tenant representation business lines in one fell swoop.
Additionally, perhaps of greatest note, KLNB gets to fulfill its long-held goal of entering the multifamily market, and it gets to do so overnight through the Edge acquisition. KLNB isn’t just expanding into multifamily; it is doing so on strong footing with the expertise that comes with Edge’s $9.5 billion in multifamily sales activity across the Mid-Atlantic. Given current multifamily market conditions, KLNB will have its hands full.
“Current market volatility has challenged fundamentals in recently popular investment markets like Phoenix, Tampa, Fla., Jacksonville, Fla., Atlanta and Houston. Furthermore, increasing cost of capital and softening yield compression are causing risk-averse investors to begin reducing exposure in secondary markets and reconsider the safety of the Mid-Atlantic,” according to a fourth quarter 2022 report by Newmark.
The combining of KLNB and Edge comes after a few years of fruitful discussions that ultimately convinced both firms that they will be more powerful as one. The companies have the support of Joe Sutton, Edge’s founder & former managing partner, who announced in late 2021 that he would be leaving Edge.
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