Commercial real estate service provider Cushman & Wakefield this week provided more details about its proposed IPO, in which it is seeking to sell 45 million shares for $17 per share for gross proceeds of $765 million. Under those terms, the company’s market cap would be nearly $3.4 billion, placing it below competitors CBRE Group and JLL. More than half of the proceeds would go toward paying down debt.
Cushman & Wakefield’s proposed IPO comes a few years after a wave of consolidation swept through the commercial brokerage industry. Among other transactions in 2014 and 2015, DTZ acquired Cassidy Turley and then Cushman & Wakefield; Savills and Studley merged; CBRE bought Johnson Controls’ global facilities management division; and FirstService Corp., looking to focus on residential property management, spun out Colliers International into a separate publicly traded company.
While Cushman & Wakefield's IPO is capturing the bulk of industry attention, several other firms are pursuing deals to enhance efficiency and competitiveness in this prolonged real estate cycle. They may not match the level of merger and acquisition activity three to four years ago, but the deals continue to remake the property services business as companies expand their offerings and reach. Here a few of the more significant transactions:
- Caisse de depot et placement du Quebec, one of Canada’s leading institutional fund managers, this month invested $250 million in Avison Young, the Toronto-based brokerage and services firm that has expanded from 11 offices in Canada to 84 locations around the world in less than a decade. Avison Young plans to use the funds to accelerate acquisitions and the recruitment of professionals, and to buy out shares held by certain founders, former principals and Parallel 49 Equity, its current equity partner formerly known as Tricor Pacific Capital.
- Developer Madison Marquette and service provider PMRG announced in June that they had completed a merger that will expand investment management and property services to more markets. Washington-based Madison Marquette, which specializes in mixed-use and retail properties, is dominant on the coasts, while Houston-based PMRG has a strong presence in the south. In particular, the new firm will focus on meeting growing demand for mixed-use investment, development and management.
- In May, Toronto-based Colliers announced that it would pay $450 million to buy 75% of real estate investment manager Harrison Street Real Estate Capital. With some $14.6 billion under management, Chicago-based Harrison Street acquires and develops student housing, senior housing, storage facilities, and healthcare buildings. Harrison Street also has a London office, and the transaction will provide Colliers with an investment management platform that it can leverage globally. The deal, which was expected to close in the third quarter, calls for Colliers to pay an additional $100 million in 2022 upon meeting performance targets.
- Colliers also acquired the Utah, Alaska and Glendale, California, offices of Coldwell Banker Commercial Advisors, a privately held affiliate of Coldwell Banker Commercial in April. That was part of a larger transaction in which First Capital, a real estate finance firm based in New York, acquired 12 offices of the Coldwell Banker affiliate spread throughout the Northeast, Texas and Southwest to form Advisors Commercial Real Estate, a new national investment and brokerage platform.
- In May, Newmark Group, which operates as Newmark Knight Frank, said that it had agreed to acquire RKF Retail Holdings, a firm specializing in retail leasing, investment sales and consulting services. The deal between the two New York companies is expected to close by the end of the year. More recently, Newmark announced that it had acquired the Denver and Pasadena, California, offices of Integra Realty Resources to further build out its valuation and advisory business.
