Acquisition of Cassidy Turley Will Lengthen Firm’s Global Reach

Cassidy Turley, TPG, William Blair & Company, PAG Asia Capital, DTZ Investment Holdings, Microsoft, Bank of America, Goldman Sachs, Cornish & Carey

cassidyBy Nancy Amdur

Commercial real estate services firm Cassidy Turley announced earlier this week that it agreed to be acquired by an affiliate of DTZ Investment Holdings in a move that will strengthen the brokerage’s presence worldwide.

[contextly_sidebar id=”tsPTz1goaf7AF1Ll7OrG437aIr7G4JVQ”]Washington, D.C.-based Cassidy Turley, which carries 13 Northern California offices, will take DTZ’s name once the acquisition is complete.

The DTZ affiliate is backed by a consortium including private investment firm TPG, alternative investment manager PAG Asia Capital and the Ontario Teachers’ Pension Plan.

The deal, expected to close by year-end, will follow the completion of the same group’s $1.2 billion purchase of global commercial property services firm DTZ from UGL Ltd. of Australia, scheduled to be final next month.

“The combined companies will create a game-changing organization—not only for us but for the entire industry,” said Cassidy Turley’s CEO Joseph Stettinius, Jr. in a statement released about the deal.

Cassidy Turley has more than 60 offices nationwide. Joining with Chicago-based DTZ, which has a strong presence in Europe and Asia, “will be enhancing our international capabilities,” said a Cassidy Turley spokeswoman.

A broader global reach could benefit Cassidy Turley in assisting local technology and other firms growing internationally, she added.

“It puts them in conversations that the firms individually were going to struggle to be a part of,” said Brandon Dobell, a partner and group head of global services for Chicago-based investment banking firm William Blair & Company. He added that the combined company could offer more services to global firms such as Microsoft, Bank of America or Goldman Sachs.

“Cassidy Turley is a leading real estate services business in the U.S. and will complement DTZ’s existing very strong businesses in Asia and Europe as well as DTZ’s existing U.S. businesses,” said Ben Gray, the managing partner, Asia, for TPG, in a press release.

Combining with DTZ presents a minimal overlap in leadership, infrastructure and market coverage in the U.S., according to Cassidy Turley’s announcement about the deal.

The new firm will post combined revenues of about $2.9 billion and comprise more than 28,200 employees.

In terms of global revenue, this will make it about the same size as Cushman & Wakefield, which is the third largest among commercial real estate firms, said Dobell, whose specialties include the real estate services industry.

CBRE Group Inc. is the leading company in the sector with revenues expected to total just below $9 billion this year, and it is followed by JLL, with projected revenues for 2014 totaling roughly $4.5 billion, he said.

Terms of the Cassidy Turley purchase were undisclosed, but the company’s valuation likely is around $500 million to $600 million, according to a source with knowledge of the industry. The same amount was reported this week in The Wall Street Journal.

Brett White, former CEO of CBRE, is investing in the acquisition and will join the board of directors once the DTZ transaction is complete. He will be executive chairman of the new company in March 2015. Tod Lickerman will continue in his current role as DTZ’s global CEO. Stettinius will become chief executive of the Americas.

White is well known in the industry as he oversaw much of CBRE’s growth between 2001 and 2012. His role following the acquisition shows that the new owners are “committed to building a good business,” Dobell said.

The Cassidy Turley and DTZ announcement follows other recent consolidations in the commercial real estate services industry, including Newmark Grubb Knight Frank’s purchase of Cornish & Carey and London-based Savills PLC’s purchase of New York-based brokerage Studley Inc.

“[After] this acquisition, there are not a whole lot of medium-sized or regional firms left,” Dobell said. The sector seems to be moving toward having “several large global firms with multiple service lines that can take care of virtually anything within commercial real estate services [along with] niche players that do a particular service line or particular geography well,” he added.

Cassidy Turley completed $25.8 billion in transactions last year, including $6 billion in Northern California. The firm manages approximately 400 million square feet on behalf of institutional, corporate and private clients. Cassidy Turley has 65 international offices through a partnership with London-based GVA Grimley.

DTZ’s 2014 revenues are expected to total $2 billion. The firm manages 2.9 billion square feet of office, industrial and retail property among 209 offices in 52 countries, according to the company’s Web site.

West Coast Commercial Real Estate News