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Mark Rose, Chief Executive Officer of Avison Young Inc. poses for a portrait at the company offices in Toronto.Deborah Baic/The Globe and Mail

These days, there aren't many commercial real estate firms that are free from the burdens of debt. And of the few who aren't, there's an even smaller number who can match the growth numbers coming out of Avison Young, which has seen its revenues grow annually by 30 to 40 per cent over the past three years.

For that reason, the Toronto-based company has received many inbound private equity calls, both from people who want to buy the whole firm, and from those who wanted just a piece of the action. For the most part, management had been shrugging them off.

That is, until Tricor Pacific Capital came calling. The two companies did a little dance for a few months to get to know each other, and when the music stopped, Avison Young accepted an offer, exchanging two board seats and new common shares for $40-million of new cash.

"We weren't seeking capital but we had always said that... we'd be happy to work with private equity to grow," said Mark Rose, Avison Young's chief executive officer.

The commercial real estate firm doesn't have a specific use of proceeds from the investment, but Mr. Rose said that part of it will go toward beefing up the company's new Los Angeles and New York offices, and the majority will be used to simply beef up its current growth plan.

Mr. Rose also made it clear that none of the managers are cashing in their holdings. Avison Young will issue brand new shares to Tricor, so the pie is simply being shared by more people.

Avison Young did not disclose the terms of the deal, and because it is a private company, its books aren't open to the public, but Mr. Rose said his firm much preferred a private equity investment over debt financing because the firm has a debt-averse culture.

A number of real estate firms blew up during the worst of the financial crisis because they were saddled with too much debt, and Mr. Rose wants to prevent that at his own shop. Real estate service companies "really are not suited for higher debt loads," he said.

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