Colliers Acquiring Investment Firm Rockwood Capital
Colliers is investing an undisclosed sum into real estate investment management firm Rockwood Capital, acquiring a 65% stake in the firm, it announced Wednesday.
The move to add Rockwood’s services to its roster is yet another by a major brokerage to offer more services and expertise under one umbrella. It is a strategy that has often served brokerages well.
“This is the latest step in our ambitious growth strategy to build a world-class investment management platform within Colliers,” Colliers CEO and Chairman Jay Hennick said in a statement.
Earlier this week, Toronto-based Colliers raised its revenue forecast for the year from “high single-digit percentage growth,” which it had announced in February, to low double-digits, CoStar reported. One reason for greater confidence was the expectation of added revenue from new acquisitions, including the January purchase of the British-based infrastructure investment management firm Basalt Infrastructure Partners, CoStar said.
“Our partnership with Rockwood will expand our operations in the U.S. and add several new asset classes and strategies, including excellent capabilities in the rapidly growing real estate credit space,” Colliers co-Chief Investment Officer Zach Michaud said in a statement.
The firm said it expects to draw between $70M and $75M in annual management fee revenue from the Rockwood acquisition. Colliers referred to the new arrangement as a “perpetual partnership model.” Rockwood’s senior leadership team will hold the remaining 35% of the firm’s equity.
Rockwood makes equity and credit investments in North America across multifamily, office, mixed-use, life sciences, hospitality and retail real estate. It has more than $12B of assets under management. Its investors include public and private pension funds, insurance companies, sovereign wealth funds and foundations.
The transaction is expected to close in Q3 of this year.
Colliers isn’t the only brokerage expanding its offerings and its reach. Just yesterday, Cresa announced it would merge with Texas-based ESRP in an effort to have comprehensive coverage in major Texas markets. JLL has leaned heavily into proptech, acquiring a proptech platform that optimizes building control systems using artificial intelligence in January and launching its own algorithm-powered valuation tools in the spring. Multiple brokerages have opened their own coworking or flexible office brands.
“[Brokerages] have monetized change,” Stephen Sheldon, an equity research analyst at William Blair, told Bisnow in November. “Bigger firms will get bigger, taking market share across different services lines.”