A Brief History of Commercial Brokerage Mergers
Another white hot commercial real estate market, another torrent of brokerage mergers redrawing the industry's map. The deal at the top of everyone's mind this week is Colliers' reported purchase of New York retail specialist RKF. But while the industry is abuzz about consolidation fever, the merger trend has always been in style.
Here are a few acquisitions of the past couple decades that have formed the industry as we know it today, but may not recognize tomorrow.
Merger: LA-based CB Commercial buys London's REI Ltd., otherwise known as Richard Ellis.
Price: $100M in cash and stock
Aftermath: The '98 deal gave the renamed CBRE sway over Richard Ellis' operations in 28 countries and grew the company to 8,000 employees spread over 200 offices. Eight years later, CBRE paid $1.8B for Trammell Crow. That transaction came amidst a booming commercial market that would soon be hobbled by the 2008 financial crisis.
Deal: Jones Lang Wootton, based in London, merges with LaSalle Partners, out of Chicago.
Price: The deal was valued at $435M.
Aftermath: The newly formed Jones Lang LaSalle (now known as JLL) became one of the biggest RE services firms on the planet by combining JLW's prowess in Asia with LaSalle's North American assets. JLL's 2008 acquisition of The Staubach Company further cements its status as an industry top dog.
Merger: BGC Partners acquires the bankrupt Grubb & Ellis.
Price: The deal entailed a $30M credit offer, $16M cash and $3M going toward former Grubb & Ellis workers' legal claims.
Bottom line: The long and winding transaction followed by a few months BGC's purchase of powerhouse New York brokerage Newmark Knight Frank and gave the rising real estate force a jolt of the "fully integrated" service platforms it sought.
Merger: London-based Savills picks up New York's Studley, a major tenant rep.
Price: $260M, half in promissory notes, half in cash and shares.
Upshot: The deal gives the 159-year-old Savills its first American (and thereby global) toehold. In March of this year, Savills Studley bought the management consulting company KLG Advisors.
Merger: DTZ buys Cushman & Wakefield from Italy's EXOR SpA.
New World Order: The deal followed DTZ going to private equity player TPG for $1.1B late last year. In January 2015, DTZ scooped up Cassidy Turley for a reported $557M. The long gestating "alphabet soup" deal with C&W became one of the most important brokerage mergers when it closed last month. Aside from the price tag and the potential deals it bought, the union arguably formed a true blue rival to industry heavyweight champs CBRE and JLL.