About FTI Schonbraun McCann Group
Start with SMG
For over 30 years, the Cornerstone Accounting Group operated under another name: the Schonbraun McCann Group. Founded by Bruce Schonbraun in 1973, SMG quickly established itself as an expert in the real estate and real estate finance industries, providing a complete range of accounting, tax, advisory, transaction and specialty financial services.
Today, Cornerstone’s clients include some of the country’s top hedge funds, developers, financial institutions, pension fund advisors; real estate investment trusts (REITs) and real estate operating companies (REOCs). Over the years, the firm has worked for the likes of CB Richard Ellis Financial, Prudential Real Estate Investors, Citigroup, Tishman Speyer Properties and the Sapir Organization. Between 2006 and 2008, it played a role in real estate transactions valued at a total of $100 billion; it’s had a hand in major deals like Gale International’s $30 billion development in South Korea; Beacon Capital Partners’ $6.4 billion acquisition of office properties in Seattle and Washington D.C.; and the IPOs of Northstar Realty, Gramercy Capital and Douglas Emmett.
Laying the Cornerstone
In April 2008, the Schonbraun McCann Group was acquired by FTI Consulting, a publicly traded advisory business based in Baltimore. FTI is big and getting bigger: it reported $1 billion in annual revenue for fiscal year 2007, and its 3,000 professionals occupy 40 offices in North America, with additional locations in Europe, Asia and Latin America. It also made a whopping eight acquisitions in 2008. The Schonbraun McCann deal, which was valued at $125 million, included $100 million in cash and $25 million in restricted FTI stock.
Bruce Schonbraun joined FTI as a senior managing partner and group leader of its real estate practice, taking 170 professionals with him. Post-reorganization, Schonbraun McCann began operating as FTI’s real estate division within the company’s corporate finance sector. Because its brand is so well established, however, it’s keeping its name.
The formation of Cornerstone Accounting Group took place a few months after Schonbraun McCann’s acquisition by FTI. In July 2008, Schonbraun McCann spun off its accounting and assurance practice, which included approximately 80 professionals. The move left Cornerstone separate from Schonbraun McCann (which isn’t a licensed CPA firm), though the two businesses continue to work closely together.
“It has long been a clear and strong vision that the accounting and assurance services firm and consulting firm would need to grow and prosper in different ways, each with their own industry profiles and identity, especially in today’s business environment, which encourages separate platforms,” Bruce Schonbraun said in a statement. “The recent acquisition of the consulting firm provided an ideal opportunity to carve out a distinct identity for and announce the expansion of the independent accounting and assurance services firm. The name change to Cornerstone Accounting Group commemorates this new course for growth in a more focused, independent way.”
One thing hasn’t changed, though. Cornerstone Accounting Group is continuing Schonbraun McCann’s tradition of focusing on the real estate industry, as the firm calls it, “24/7 dedication to real estate.” Cornerstone’s accounting services include investment company audits, special-purpose SEC acquisition audits, agreed-upon procedures reports, regulated real estate project audits, reviews and compilations, analysis of public filings and other attest services.
A new man in charge
When Cornerstone was spun off, Stanley R. Perla, CPA, joined as managing partner. Perla came to the firm from Vornado Realty Trust (an SMG client) where he had served as vice president and director of internal audit. Before that, Perla had been Ernst & Young’s national director and partner-in-charge of real estate accounting services. Among his many affiliations: the National Association of Real Estate Investment Trusts (NAREIT), the National Association of Real Estate Consultants (NAREC), the AICPA and the New York State Society of Certified Public Accountants. An alum of Baruch College, Perla is director and audit committee chair for Madison Harbor Balance Strategies and American Mortgage Company.
At the same time, four longtime Schonbraun McCann executives were named partners at Cornerstone. These included Marge Filippelli, a partner in the Roseland, N.J. office; Harry Dublinksy, an 18-year veteran who previously worked with Forest City Ratner and KPMG; Dan Vitulli, a former senior manager at PricewaterhouseCoopers with over 15 years of diversified real estate experience; and Stuart Backer, another Garden Stater who specializes in accounting and tax services for middle market companies.
Do the math
Before its association with FTI, Schonbraun McCann was ranked as the 39th-largest accounting firm in the U.S. by revenue, according to Accounting Today’s 2008 survey. This was a big step up from its position at No. 43 in 2007. A breakdown of Schonbraun McCann’s fiscal year 2007 revenue shows why the firm wanted to spin off its accounting practice: advisory services contributed 55 percent of revenue, while tax added another 28 percent. The accounting practice brought in just 17 percent of earnings. Still, its progress up the ranks confirms what INSIDE Public Accounting and Crain’s New York Business have said about the accounting firm, calling it one of the fastest-growing in the country, and one of the largest in the metro-New York area.
750 Third Avenue
New York, NY 10017
Phone: (212) 840-7383
Employer Type: Private
Group Head of Real Estate: Bruce Schonbraun
New York, NY