Consolidation Accelerates Ahead of Market Recovery
Since the beginning of 2011, there has been a torrid level of M&A activity in the commercial real estate services industry. Recently announced deals include CBRE’s acquisition of the ING Real Estate fund management business; the sale of Newmark to financial derivatives house BGC; Colony Capital’s loan and exclusive look period with Grubb & Ellis; the recapitalization of DTZ by investment group SGP and the possible follow on merger with BNP Real Estate; and the hotly rumored takeover of King Sturge by JLL. And that is just on the services side. On the information side, Argus is selling to Altus and Costar is acquiring Loopnet.
That big money is being deployed to acquire and expand existing platforms is a clear sign that the commercial real estate market is in the early stages of recovery. Key metrics show both sales and leasing volume are up and in the major markets both rental rates and asset prices have recovered sharply for core assets. But there is a long way to go for secondary markets and non-core assets. As commercial real estate climbs out of the depths of the credit crisis, industry leaders are now looking to expand their depth and breadth of coverage in order to capitalize on opportunities.
There is little doubt that the big will get bigger and more consolidation will follow. The real question remains “how best to provide service?” Is it through a large corporate bureaucracy, best-in-class local providers or some combination that provides the requisite global infrastructure, quality control and support with the best local talent and client-centric approach? Clearly some of the recent M&A activity is following familiar strategic patterns, while others are dramatic course changes.
Over the past 40 years the commercial real estate industry has grown from a local business to a global industry with each economic cycle accelerating the transformation. Now more than ever global resources and reach are critical to serve commercial real estate clients at the local level. The trick is to be able to deliver local service at the global level. Finding the balance between entrepreneurial local market expertise and the institutional strength of a global company is the key to optimizing global real estate services. In the quest for scale and market share, the customer is often lost.
As the largest global managed network of commercial real estate firms we are committed to be a driver and leader in this industry transformation, evolving to serve the ever-growing needs of our clients without sacrificing the local touch and customer care we have been known for. Contact NAI Keystone Commercial & Industrial, LLC who is the Reading’s premier commercial and industrial real estate firm. visit www.Bryan-Cole.com for more information.
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NAI Keystone is a full service commercial and industrial real estate firm located in Reading PA; We handle buyer, tenant, and landlord representation throughout Pennsylvania and with the association of our global partners we can assist in locating product throughout the country.