Big Spokane-based commercial real estate brokerage Kiemle & Hagood Co. says it’s on pace for a year of strong growth in its commercial property management services, continuing and possibly improving on a several-year trend. 

Having recently expanded its property management contract with the large Providence Health & Services provider network, the company now is looking to hire additional staff, as well as create new offices in both the Tri-Cities and Missoula, Mont. 

Gordon Hester, company vice president and director of commercial management, says Kiemle & Hagood property management revenues have grown consistently by 7 percent to 8 percent each year for the last five years. 

“We’re up 12 percent this year, and I expect that will continue next year as well,” he says. 

Founded in 1971, Kiemle and Hagood provides expertise in real estate sales and leasing, facility management, development and consulting, and tenant representation.

Hester says the company currently has 160 employees, including office staff, maintenance technicians, and field staff. About 65 of those employees work in the company’s corporate office on the fourth floor of the Chase Financial Center, at 601 W. Main, downtown, while another six work in the company’s Coeur d’Alene office, at 2065 W. Riverstone Drive. 

Hester says the company’s other employees include maintenance workers, on-site managers, and service coordinators at various residential properties. 

“We currently manage just over 7 million square feet of commercial space and 38 apartment communities that include a total of about 1,300 units,” he says. 

He says the company’s recent growth is due to two factors—a shift in marketing focus and a willingness to expand its services geographically. 

“We wanted to focus on the level of customer service we’re able to provide,” he says. “Being able to tailor our services to fit customer needs is something that has allowed for ongoing business and led to our current level of success.”

Hester says the company’s pursuit of new office locations has been part of bringing a new level of service to existing customers. 

“We wanted to be able to add offices in areas where we were already providing brokerage services, to better serve our current customers as well as pursue future growth opportunities,” he says. 

Last month, Kiemle & Hagood announced it had expanded its property-management services contract with Providence Health & Services, the Renton, Wash.-based nonprofit health system, which includes Providence Health Care here. 

Providence’s network here includes Sacred Heart Medical Center & Children’s Hospital and Holy Family Hospital, critical-access hospitals in Colville and Chewelah, and Providence Medical Park in Spokane Valley, along with other services and programs. Providence Medical Group, the physician division of Providence Health Care, includes more than 700 primary-care, specialty-care, and hospital-based providers serving patients throughout the region. 

Hester says the new management agreement added 82 facilities to its portfolio. That number includes more than 2.1 million square feet of medical office space in Spokane, Stevens County, Tri-Cities, Walla Walla, and Montana.

“We already had a small existing portfolio with Providence. They’ve always been a good customer,” he says. “The properties were added gradually by region, starting with Spokane, then the Tri-Cities, followed by Missoula and Walla Walla.” 

Hester says the company hired some additional employees to manage the new properties, including three property managers—one each for Spokane, Tri-Cities, and Missoula—and five maintenance technicians in the Tri-Cities. 

Alex Herr, Providence Health & Services’ Spokane-based interim regional director for Eastern Washington and Montana, says the expansion was a way of consolidating its property management efforts throughout those locations. 

“Having a single point of contact ensures all properties are performing at their highest and best uses both financially and operationally,” says Herr. 

He says Providence has enjoyed working with Kiemle & Hagood and expects to continue to do so. 

“They’ve been a valued partner in this process,” he says. “We’re proud our Eastern Washington and Montana locations can be leaders for Providence in this venture and hope to use this as a model going forward.” 

In addition to expanding its portfolio of properties with Providence, Kiemle & Hagood began construction of its new Tri-Cities office in Kennewick last month. It’s still searching for office space in Missoula. 

“We have always done well in smaller markets where we’re able to provide good service and become involved in the community,” says Hester. “Spokane and Coeur d’Alene are both smaller markets that have provided our business with a good start over the years. We see that same potential in Missoula and the Tri-Cities.” 

Hester says the Kennewick office will include about 1,400 square feet of floor space and is expected to open in early December. He says he anticipates hiring an administrative person for the location within the next 60 days.

Hester has been with Kiemle & Hagood for 26 years, having started there as an assistant property manager and working his way up to his current position. 

He became a partner in the company in 2006.

Hester says commercial real estate has seen some changes in that time, most of them relating to advances in technology. 

“Technology changes have resulted in building owners, investors, and tenants wanting information quicker,” he says. “We have to be more nimble and adapt as property managers and brokers to the needs of our clients. Companies that have embraced technology are quickly outpacing their competition.”

With the change in technology comes a higher demand for bandwidth and electricity use—and the need to make sure buildings can accommodate those needs, Hester says. 

“Brokers need to be educated on what to look for when representing office tenants in particular, to insure the infrastructure can meet their customer’s demands,” he says. 

Hester says one area that continues to evolve dramatically is the retail real estate market. 

“Big-box traditional stores are struggling to keep market share against smaller specialty stores and online competition like Amazon,” he says. “You see that playing out now with Macy’s in a big way, and with many other large retailers trying to retool or downsize.”

Looking ahead, Hester says Kiemle & Hagood’s two main challenges will be in managing its new growth while maintaining quality service and continuing to recruit talented new employees. 

“Most of the industry leaders believe we are nearing the end of another real estate cycle, so there are economic and political changes that we will have to navigate and that will impact our clients and business,” he says. 

“Our business is very much a relationship and service business, and we continue to look for talented young people who will be able to lead our company 20 years from now.”