As Brendan Kane tells it, the staff of Peregrine Property Management huddled around the shiny, new black Dodge Dakota purchased in October “like it was some kind of jewel.” For Peregrine, the truck represented tangible progress of the company’s quest to build a property-management group amid one of the darkest economic times in decades.
The East Providence company started the year managing 60,000 square feet of space across two complexes, including one that Peregrine’s sister company, the Peregrine Group, developed. In February, it took over management of the American Locomotive Works complex in Providence. That got the ball rolling and by July it had added 12 properties and today manages some 1.4 million square feet across 16 properties in Rhode Island and Massachusetts.
The rapid growth led to a regional management position and then the purchase of the truck, so the manager could travel from site to site.
“This business – from what we’ve seen to date – is slightly recession resilient,” said Kane, a principal at Peregrine Property Management.
The company also discovered a market that Kane and fellow principal Jeffrey Spratt call largely untapped in Rhode Island and southeastern Massachusetts. The area contains many property owners who own small residential or office complexes as investments. Overwhelmed with the intricacies of managing the property, responding to tenant complaints or navigating the financing, they are happy to pay Peregrine a fee to take over management.
Kane said most of the company’s new clients are just such people, often forwarded by their accountants, lawyers or friends.
“There’s a ton of it there that has been unserved,” Kane said.
Kane and Spratt said at this point in the company’s maturity – it’s only 20 months old – it makes little sense to turn down jobs, especially when they land in the company’s lap. It has never found the need to respond to a request for proposals to manage a facility because referrals have ended with jobs in all but one case. Indeed, the company needed to cut back its recruitment of customers last summer as it built up the infrastructure to support its new portfolio of clients.
In the spring, Peregrine counted just two employees, Kane and Spratt. By the fall, it had nine, including the two principals. And the two have their eyes set on bigger goals, eventually maintaining larger and larger commercial complexes across New England.
Some day, perhaps years from now, the company wants to own the buildings too, becoming a real estate juggernaut. Owning the buildings, of course, builds equity and means the company will never lose its management contract.
That would put the company on a collision course with some of the biggest names in real estate property management, like Rhode Island Property Advisory Co., which managed 6 million square feet of space in 2008 and KGI Properties, which managed 5.1 million square feet.
Kane and Spratt say such head-to-head competition is years away. But they are prepping themselves for that day with smaller complexes located within a reasonable drive of the company’s East Providence office.
The geographic proximity means the principals can drop in at the facilities the companies manage and check on staff and make face-to-face contact with tenants. Kane said that proves important for building relationships and creating a foundation of credibility as the company seeks bigger contracts.
“We’re going to take a measured approach to our growth,” Kane said.
That’s probably a wise approach, said Alan Doyle, a principal at Larew Doyle & Co., which helps developers find financing. Doyle, who has worked with the Peregrine Group, said its spinoff is years away from building the scale necessary to chase large developments.
But Doyle said the management company has found an opportunity with its focus on amateur real estate investors who need a guiding hand.
“That’s a tough chore to do but they’re very qualified and I don’t know anybody else who’s doing that for small investors,” Doyle said.
Doyle said the management company was well-positioned to draw on expertise from the Peregrine Group, a development firm. The group developed the Rumford Center – a mix of retail, offices and residences – as well as other projects. It also managed construction of the multimillion-dollar Ocean House in Westerly.
One of the group’s principals, Colin Kane, is Brandon Kane’s brother. Both have experience working for large construction firms – Colin at Gilbane Inc. and Brandon at New England Construction.
The Peregrine companies have drawn a team largely poached from other development firms, including Struever Bros. Eccles & Rouse, which developed ALCO.
“The idea of them joining all those elements and doing asset management is a logical progression for that company,” Doyle said. •
