Word on the real estate street is that Jones Lang LaSalle and Staubach Company are about to finally announce a merger in a deal worth more than $700 million.
The imminent sale of large Texas-based tenant rep firm Staubach to Jones Lang LaSalle, a public company headquartered in Chicago, could be seen as a barometer of the commercial real estate market’s climate.
“I think what Jones Lang LaSalle did was very smart,” said Mark Jaccom, president of GVA Williams, speaking as though the acquisition was completed. “It proves that a tenant rep firm will be able to survive and better service their clients being part of an organization that has multiple disciplines.”
Jaccom, who left tenant rep firm Studley two years ago, said he foresees in the not so distant future that the landlord-tenant business will end up being in the hands of the bigger generalists: CB Richard Ellis, Colliers International, Cushman & Wakefield and Jones Lang LaSalle.
“I think you are going to see these four titans fighting it out there,” Jaccom said.
GVA Williams has a tenant rep division, which Jaccom directly runs, in addition to landlord rep, leasing, asset management, project management and consulting services.
Meanwhile, Real Estate Weekly has reported that GVA Williams is looking to be acquired, which Jaccom denied. The company has been looking for a partner “that will give [GVA Williams] more global reach and growth opportunities and will have deeper financial pockets,” Jaccom said.
He said a deal like this could be closed by year’s end.
Neither Jones Lang, a global commercial real estate services and investment management firm, nor Staubach, founded in 1977 by former star Dallas Cowboys quarterback Roger Staubach, the company’s executive chairman, would comment.
Julien Studley, who established the tenant rep model with the founding of Studley in 1954, said, “I think it’s probably a good merger. I think that Jones Lang wants to grow.”
Studley said he suspects that “Jones Lang may want to get strong in [the tenant rep] area.”
Barry Hersh, associate professor at New York University’s Real Estate Institute, said that Jones Lang LaSalle and Staubach are a good fit.
“On one level, they both wear dark suits and white shirts,” Hersh said. “The corporate culture seems a little bit similar in that regard. They’re button-down corporate type of firms.”
Such a move would not be unusual in a slow market, which the industry now faces.
“In tougher times, often bigger firms gobble up smaller firms,” Hersh said.
Tenant rep firms say that they have the tenant’s best interest at heart because they are not representing landlords.
“The merger is not advantageous for the corporate real estate consumer or the tenant because it means there’s one less tenant advisory in the marketplace,” said Marcus Rayner, a principal at CresaPartners, a tenant rep firm based in Boston with business in New York City. “One of the reasons to be a tenant rep firm is you’re trying to avoid the conflict of representing landlords and tenants in the same market.”
However, for Cresa’s business a merger could be good for business.
“Statistically it would make us the largest tenant rep firm in North America,” Rayner said. And, Rayner said his company will not join a larger firm and will maintain its niche. “We will remain independent despite the industry trend,” he said.