The Tampa broker-dealer will move into a 130,000-square-foot building Tropical Sportswear had intended for its headquarters.
By KRIS HUNDLEY
Published March 30, 2004
TAMPA - GunnAllen Financial, a broker-dealer with a fast-growing network of independent brokers, on Monday acquired Tropical Sportswear International Corp.'s new but never occupied headquarters at 5002 W Waters Ave. in Tampa.
GunnAllen, which provides back-office and support operations for more than 800 brokers nationwide, paid $9.5-million for the 130,000-square-foot building that was completed last year.
Financially ailing Tropical Sportswear spent $16.4-million to construct the headquarters before putting it on the market late last year. The apparelmaker has said it will use the proceeds to pay down debt. The new building is adjacent to Tropical's corporate offices and distribution center.
GunnAllen was created in 1996 when Richard A. Frueh (pronounced FREE) and Donald J. Gunn bought and renamed Napex Financial, a broker-dealer that had been started a decade earlier by three former investment bankers with Raymond James Financial. GAF Insurance, offering insurance products like annuities, was added in 1998. Frueh and Gunn had been investment advisers since the late 1980s with Chatfield Dean, a small brokerage firm in Tampa.
Gunn and Frueh, whose middle name is Allen, began recruiting brokers from full-service wire houses, insurance companies and other independent brokerages. The brokers maintain their own offices, paying overhead and expenses, and rely on GunnAllen for technical and operational support. Though GunnAllen briefly provided research on Checkers Drive-In Restaurants Inc. of Tampa, all research now comes from outside sources. Pershing, a wholly owned subsidiary of the Bank of New York, acts as clearing agent for most of GunnAllen's transactions, along with National Financial, as well as Raymond James.
Working as independents, brokers are not restricted to selling proprietary products or funds. In exchange for covering their own expenses, such brokers also receive higher commissions than those who are employees of traditional Wall Street brokerages.
"Our brokers want flexibility and choice in terms of products," Frueh said. "And the fact that both my partner and I still serve as financial advisers gives us an edge."
Frueh declined to disclose revenues for GunnAllen, which is privately owned. He said the company is now among the top 15 independent brokerage firms in the United States; one of its largest competitors is Raymond James' independent broker network, based in St. Petersburg.
As GunnAllen's broker network has grown, quadrupling in the past two years, so has its headquarters staff. Today the company has 210 workers wedged into 26,000 square feet on the seventh floor of a high-rise overlooking N Westshore Boulevard in Tampa.
In an office built for two, eight network support workers hunch over computers. Bond traders cluster elbow-to-elbow around a bank of computer screens. Documents are scanned in an expansion space that was once a lawyer's office, complete with blue brocade wallpaper. Chief compliance officer Richard Nummi, who was an attorney with the Securities and Exchange Commission before joining GunnAllen in May, is stuck in a tiny office off a back hallway.
Frueh said the stock market's downturn in 2001 and 2002 dampened his willingness to relocate, even as his broker network was expanding.
"That's why we're 100 (cars) overparked in the garage here," he said. "But our goal was to move this year. Either design-build, lease or buy. When we found the Tropical Sportswear building, we felt it would accommodate our growth."
Frueh, who did not consider relocating the company outside Tampa, said the move into the new headquarters should take place by July. In addition to the purchase price, GunnAllen will invest about $2.5-million in technology in the building and add a parking garage, expected to be completed by fall.
With the additional space, Frueh plans to add about 40 employees in Tampa by year's end. He was unable to provide an average salary for headquarters' staff. GunnAllen's broker network, meanwhile, is expected to grow to 1,250 by the end of 2004.
"I see continued growth in this trend of brokers going independent," Frueh said. "With technology today, it's amazing what we can deliver to a broker's desktop, regardless of where he is."
