Mark Halloran is a director at GRS Group. He can be reached at 646.912.4748 or via email at firstname.lastname@example.org
In an investor presentation released in March, the management of commercial real estate services firm JLL said it intended to double its capital markets reach by 2025. The firm wasn’t kidding.
Not long after, JLL announced it is purchasing CRE cap markets firm HFF for $2 billion, giving it a firm that has reportedly closed $800 billion over 27,000 transactions since 1998 and hit $650 million in revenue last year.
Commercial Observer said the deal will create a combination that makes JLL “the biggest mortgage brokerage in America, according to data from the Mortgage Bankers’ Association,” which said that HFF advised $61 billion in deals in 2017, putting it at nearly $20 billion above its largest competitor, Eastdil. Meanwhile, JLL did 24.1 billion that year.
According its own figures, HFF last year placed $54.5 billion debt, did $37.4 billion investment advisory and $7.5 billion equity placement. Though it works in all commercial real estate property sectors, more than half of its $81.2 billion in transactions were in multifamily and office. The inclusion of HFF’s GSE lending platform exponentially expands JLL’s already strong position in the agency multifamily sector.
HFF’s fiscal year in 2018 ended with $116 million in net income, a 22.1-percent rise over 2017, while revenue hit $662 million, an 8.6-percent year-over-year boost. In early March, HFF arranged just under $125.7 million in construction financing for a mixed-use lifestyle shopping-center, with residential and retail space, in Boca Raton, Fla., called Uptown Boca.
Meanwhile, the marriage of JLL and HFF could cause some major brokerage-community movement, reports The Real Deal. The article said HFF employees were getting calls from competing firms just after the deal was announced, and this movement between firms tends to happen during major M&A deals.
For its part, JLL’s full-year income totaled $484.1 million in 2018, an 80-percent increase from 2017, while revenue was $16.3 billion, up from $14.5 billion.
In its investor presentation in March, linked above, besides increasing its capital markets presence by 2025, it also plans to grow its corporate solutions 10 percent annually, and local-market revenue by seven percent.
On the property management front, JLL, which oversees 4.6 billion of commercial real estate, recently launched JLL Curea Approach, which aims to provide an experiential-office offering to tenants in select market by giving tenants access to educational, health and wellness programs, among other offerings.
JLL’s acquisition of HFF is a continuation of big-player trends in CRE brokerage. Last summer Cushman & Wakelfield went public, raising $765 million to primarily pay debt.
About GRS Group
GRS Group is a leading provider of commercial real estate (“CRE”) services worldwide. With offices across the United States, Europe, and affiliates around the globe, GRS Group provides local market knowledge with a global perspective for institutional real estate investors, occupiers and lenders worldwide. The GRS Group team has evaluated and advised on over $1 trillion in CRE transactions.
Through the company’s proprietary management process, Global Services Connection, GRS Group delivers an integrated suite of services including Financial Advisory, Transaction Management, Assessment and Title Insurance. We provide a single point of contact, capable of leveraging the GRS Group portfolio of companies and delivering customized solutions to assist our clients in achieving their investment goals.