Executives of Cornerstone Real Estate Advisers LLC added a top post with an eye toward succession planning and expansion of the firm's global reach.
Cornerstone — a subsidiary of MassMutual Finance Group — hired Scott D. Brown, a veteran real estate investment manager, as president. Mr. Brown, most recently was managing director and head of the Americas at CBRE Global Investors' global multimanager unit, took on the role from CEO David J. Reilly. At some point down the road, Mr. Brown will take over the CEO role, too, Mr. Reilly said in an interview.
With the addition of Mr. Brown, Mr. Reilly now will be able to stick to one job. He has shouldered a dual role since 2005, when Alan Connor retired. While the firm has been doing succession planning, there is no timeline set for Mr. Brown to succeed Mr. Reilly.
“My retirement is not imminent,” Mr. Reilly said. “My goal is to have Scott ready to take on the responsibility and then I will move on to the board of directors. … I will not leave him in the lurch.”
As CEO, Mr. Reilly will continue being “primarily responsible for analyzing the future and the theoretical side of the equation,” he said.
Mr. Brown will take over the investment side of the operation, including Cornerstone's equity and debt investment businesses.
Cornerstone executives have known and worked with Mr. Brown for 15 years, both Mr. Reilly and Mr. Brown said. “I've known the other senior investment professionals for at least a decade or more, and I've always been impressed,” Mr. Brown said. “There's a great culture. There's a great fit there. I've watched them grow and have made investments together in the several roles I've been in the past.”
The addition of Mr. Brown is as much about bringing in an executive with international investment experience to expand Cornerstone into Europe and Asia as much as it is about succession.
Cornerstone will maintain its strategy as a value-added and core real estate investment manager. Cornerstone has close to $43 billion in assets under management — $15.3 billion in equity, including $1.3 billion in real estate securities, and $27.5 billion in debt.
But Cornerstone's offerings will be more global. “There's no doubt in my mind we will have more of a global initiative,” Mr. Reilly said when asked where he expects Cornerstone will be in five years. “Real estate is in an interesting environment right now. Real estate is expanding into a shrinking globe.”
Cornerstone started venturing outside the U.S. seven years ago, opening an office for its real estate securities business in Europe and another one in Asia. In 2009, Cornerstone bought Protego Real Estate Investors LLP — a European real estate investment firm that invested primarily in London and the Nordic region— after Cornerstone merged with the real estate finance unit of MassMutual's Babson Capital.
Now, Cornerstone is shopping to possibly acquire a real estate investment firm in Asia, to expand its reach there. “The challenges in Asia are transparency,” Mr. Reilly said. Any firm would have to operate in the same fashion as U.S. firms do, with the same transparency and compliance, he said.
What's more, the firm would have to be a real estate investment manager rather than mainly a developer. “They are very rare,” Mr. Reilly said.