From start-up to success: How this agency grew to 5 offices in 2 years

The locally owned commercial agency business also touts 1,900 property assets being managed under its belt, ranging from industrial sheds to shopping centres and valued at a staggering total of $2.25 billion. 

The latest feather in the agency’s cap is being named a finalist in the 2023 Telstra Best Of Business Award in NSW, which reportedly put X Commercial ahead of 20,000 nominations for the High Growth category award.

Daniel O’Brien, the Sydney-based agency’s chief executive, said the latest recognition comes after “two years of very strong growth”. 

“[We] built a very strong business both through acquisitions and organic growth. We now have offices in each of Sydney’s major industrial and commercial markets, with more partnerships to be announced over the next few months,” he added.

X Commercial currently has offices in South Sydney, Lower North Shore, the Inner West, the City Fringe, and now South-West Sydney, with the latest outfit added to the agency’s stable late last year through the acquisition of Industrial Zone Real Estate of Padstow in the South-West Corridor.

“Opening our fifth office in the South West of Sydney allowed us to explore a new market with the acquisition of one of the largest and longest standing independent agencies in this market,” Mr O’Brien commented. 

Aside from the strategic acquisitions, the executive believes that diversifying their offerings was key to their expansion and helped them make a point of difference in the market. 

“We have established three new divisions, Finance, Valuations and Capital. These business lines enable us to service our clients better than a typical agency.” 

With the creation of X Commercial Capital, X Finance and a Valuations and Advisory Division in-house, Mr O’Brien highlighted that they now have 45 staff assisting clients “in every step of their property journeys”. 

“We have been able to offer our clients greater targeted and focused advertising, with our social media, including Linkedin,” he stated. 

According to the firm, its X Finance and X Commercial Capital divisions have reportedly brokered more than $100 million worth of deals in the last 12 months.

While the business has made strategic moves to drive growth, he noted that the firm leveraged Sydney’s currently strong commercial market conditions.

“The supply of new warehouses remains scarce, which is maintaining growing industrial prices. The swelling land prices are driving up rents and as a result, this drives up values,” he explained. 

In terms of commercial buildings, particularly outside the CBD, Mr O’Brien reported that they have observed “very little new development” over the last four years, especially with the COVID-19 pandemic.

“It is only in recent times, tenants have settled on their work-from-home ratios so it is my view that we will start to see tenant movements in the next 12 to 24 months. These office tenants will be seeking quality building assets with large breakout areas and a sense of community with excellent shared common facilities,” he said.

In the coming months, he expects sentiment will begin to shift as the Reserve Bank of Australia’s (RBA) monetary policy cycle progresses. 

“Right now, there is an enormous weight of money sitting on the sidelines. The super funds are swollen with money, private investors are cashed up and it seems like a waiting game now to see when rates stop climbing.

“Nervous and cautious buyers will be seeking value and will find it hard to act until the rate increases start to slow down. This is frustrating for me as the downfall with this strategy is that once the rates do stop, the money that is now on the sidelines will flood back in which will kick the market,” he explained.

By that time, Mr O’Brien forecasted that buyers who are trying to “pick the bottom” would have missed out and the bottom of the market has come and gone.

“Smart and savvy buyers are still buying now, as they know they are much closer to the bottom than the top of the market and it’s only a matter of time before Sydney real estate kicks [in] again,” he stated. 

He also forecasted that the industrial sector continues to see strong activity with an uplift in listings, while the office and residential markets will continue to face headwinds with interest rate rises.

As for what’s in the cards for X Commercial, Mr O’Brien said that the plan is to continue scaling their offering and brand. 

“Scalability is important so we can allocate the resources within the business in a focused way to achieve our company mission, which is ‘to create wealth for our clients and our staff’.”

Sharing more insights into their growth strategy, Mr O’Brien divulged that they aim to offer successful agents the opportunity to start their own agency businesses by partnering with X Commercial, adding that they “now have a capable team in place now to execute our expansion”.