UPDATED, June 11, 12:31 p.m.: Guggenheim Investments and Singapore sovereign-wealth fund Temasek Holdings have reached a definitive agreement to take part in a management buyout of Eastdil Secured from Wells Fargo, the real estate firm announced Tuesday morning.
Eastdil — a leader in New York’s investment sales market — will retain its current management and name, while Wells Fargo will retain a minority stake in the firm. The brokerage’s public market investment bankers will transition to Wells Fargo’s Corporate & Investment Banking division.
Sources told the Wall Street Journal, which first reported the news, that the deal values the firm at over $400 million, and will eventually allow Eastdil employees to hold more than 40 percent of the equity. The deal is expected to close by the fourth quarter.
Wells Fargo was reported last summer to be considering a sale of the real estate investment banking company, which it acquired for about $150 million in 1999. The bank turned to private-equity firms rather than seeking to sell to a bigger commercial brokerage such as JLL or Cushman & Wakefield.
“Guggenheim Investments, on behalf of certain institutional clients, and Temasek represent ideal partners for Eastdil Secured as we embark on this next stage of growth,” Eastdil CEO Roy March said in Tuesday’s press release. “Through this transaction, we will be better able to serve our clients with investments in enhanced technology, a broader footprint and deeper global relationships.”
The deal, which was first reported to be in the works in March, is expected to bolster Eastdil’s expansion plans in Asia, while freeing it from the regulatory challenges of being tied to a U.S. bank.
The commercial real estate industry has been going through a period of upheaval recently, as brokerages have snapped up rivals or launched major public offerings, all as new business models such as co-working threaten to disrupt the industry as a whole. JLL in March signed a definitive agreement to buy HFF for $2 billion in a deal expected to close in the third quarter.
Eastdil came in third in The Real Deal’s most recent ranking of top investment-sales firms in New York, brokering about $5.9 billion worth of deals.