Combining Cushman & Wakefield and DTZ Inc. has created not only one of the three largest commercial real estate services firm in Florida and globally, but one in which existing platforms will be enhanced and coverage gaps filled in, officials say.
Larry Richey, the Cushman & Wakefield senior managing director who will run the combined firm in the Sunshine State, says the $2 billion acquisition by DTZ parent TPG will especially manifest itself in Tampa, where both firms have offices.
“This immediately makes us the largest services firm in the Tampa market,” says Richey. “And perhaps surprisingly, there's very little redundancy. Our operations are very complimentary.”
Cushman & Wakefield currently operates six offices in major markets statewide; DTZ maintains five, in Tampa, Orlando, Miami, Jacksonville and Boca Raton.
With DTZ, Cushman will gain a stable of corporate clients and management of trophy assets such as 100 N. Tampa St., a 42-story tower that is Tampa's tallest skyscraper.
Together, the larger Cushman & Wakefield will have 50 real estate agents and 120 professionals in Tampa.
“This is a global merger that will be very important to Florida,” Richey says. “For instance, they're one of the best in the business at dealing with corporate clients.”
DTZ partners agree the combined company will be both bigger and better.
Together, the combined firm will generate roughly $5 billion in revenue annually and manage a total of 4.3 billion square feet of commercial real estate worldwide. Cushman & Wakefield, by comparison, managed just 1.3 billion square feet.
“Our clients are thrilled because now we offer all the services in commercial real estate, says Lou Varsames, a DTZ principal. “Before we just had pieces.”
“It's a very symbiotic move,” says DTZ principal Doug Rothschild. “When you dig into the details, it's easy to see how complimentary this is. It's definitely accretive for all involved.”
In addition to cost savings, the larger Cushman & Wakefield will have a greater ability to service the globe's largest corporations as the world's second-largest services firm behind only CBRE Group Inc.
“The sum here is bigger and greater than the parts. I expect we'll be able to do a lot more business with large companies in Florida as a result of this merger,” Richey says.
Cushman & Wakefield's primary competitors — CBRE and JLL — declined to comment specifically on the merger or the impact it might have.
“Consolidation is an ongoing, long-term trend in commercial real estate services,” says Robert McGrath, CBRE's New York-based senior director of corporate communications says in a statement. “This trend is being fueled by the increasing preference of investors and occupiers to manage the full spectrum of their real estate needs through integrated, full service globally capable service providers.
“We are highly focused on our strategy of producing exceptional outcomes for our clients and driving long-term, profitable growth, and extending our industry-leading position,” he added.
Industry consolidation isn't a new trend in commercial real estate, either.
In the last decade, CBRE grew by merging with both Insignia Financial Group and the Texas-based Trammell Crow Co. JLL, the result of a merger between Chicago-based LaSalle Partners and Jones Lang Wootton, grew bigger in 2008 buying the Dallas-based Staubach Co.
Cushman & Wakefield and DTZ have increased in size and stature from merger and acquisition activity, too.
In 1990, Cushman bought brokerage Healey & Baker, and three years later, DTZ was formed following a merger between four European firms. In 2007 and 2008, Cushman bought another pair of U.S. firms, including Burnham Real Estate.
DTZ, meanwhile, was acquired by the TPG Consortium — which included the Ontario Teachers Pension Fund — last year and subsequently bought brokerage firm Cassidy Turley.
- K.L. McQuaid