Subject area:                      Competitive Strategy, Corporate Level Strategy, International Business Strategy

Region:                                   United States

Industry:                               Biotechnology, Medical, Industrial, Office, and Retail Leasing

Company:                              Scheer Partners

Decision Maker:                Robert Scheer, founder of Scheer Partners, Matt Brady, Senior Vice President and Sales Manager

Dilemma: On a particularly chilly morning in early March of 2017, Robert Scheer, founder of Scheer Partners, and Matt Brady, Senior Vice President and Sales Manager, meticulously deliberated over an important decision that could impact the future of the company. While multiple tempting growth opportunities have presented themselves before, Robert was warier this time around, as many past efforts had been met with disappointing results. Since founding Scheer Partners in 1991, Robert had grown the company into the leading, locally-owned full-service provider of commercial real estate services, specializing in biotechnology in the Washington D.C. and Montgomery Country regions. Robert himself had overseen more than 1,000 transactions, including 3 million square feet of life sciences real estate projects— more than any other real estate professional in the region. The company has notable clientele, including Human Genome Sciences, MedImmune, Johns Hopkins University and the state of Maryland. Despite the tremendous success the company has experienced in their regional niche, they need to expand to other markets if they wish to grow. Internally, Robert also reflected on his eventual retirement and what it meant for Scheer Partners and his legacy; as the only shareholder of the company, he had to consider what steps needed to be taken for the long-term sustainability of the business. However, the question remained: How should they expand? The firm specialized in biotechnology-focused properties, and for this reason, Boston stood out as a potentially lucrative market for expansion. However, Scheer Partners’ extensive network in the Maryland-Virginia area also suggested that expanding into alternative property types around the locale may have been a smarter option. The pressure was on for Robert and Matt to decide how to expand; the economy was in great shape, and more importantly, this would be the perfect opportunity for Scheer Partners to grow. 

Contraction and Recovery

The financial crisis started in 2008, which caused the demand for real estate to plummet. Revenues were reduced by 80%. To make matters worse, the regional offices in Northern Virginia, Baltimore, and the partners within the investment arm took advantage of their autonomy by stealing files, internal documents, computers and clients during the contraction. Robert described the time as if “they were ripping things out of the walls”. Robert had to file significant lawsuits against the people involved, some of which are still in litigation. The size of the company shrunk from 60 employees to 10. 

With the improvement of the economy, Scheer Partners has recovered from the contraction to where they were pre-2008. During the last several years, they experienced a great deal of organic growth in brokerage, expanded back into construction and property management, and are now poised to expand their acquisitions. However, these trials made Robert aware of his age and his thoughts of his potential retirement looming. He knew he wanted Scheer Partners to grow into something bigger and better, but was cognizant that he might not be around to see all his growth initiatives through. One of his more recent primary concerns was how to create a succession plan, and how to reward other employees’ ownership of the company.  When considering those in the firm who possessed an “owner” mindset, he recalled Matt, Nate Crow (one of Matt’s subordinates in brokerage), Brian Bouey (Operations), Claudia Yates (Marketing), Adnan Sheikh (Construction), and Charlotte Sexton (Property Management). However, Robert recognized the magnitude of Matt’s talent, and knew that he would be an integral player in the expansion of the company’s businesses in the biotechnology industry.