Another major real estate firm is hopping on the SPAC bandwagon.
CBRE, the world’s largest real estate services firm, has formed a blank-check company, called CBRE Acquisition Holdings. The new special-purpose acquisition company is seeking to “identify and acquire a privately held company with significant growth potential” for a merger or acquisition, according to a regulatory filing. It’s aiming for a valuation of up to $400 million in an initial public offering.
“We believe we will be able to leverage the advantages that CBRE holds by virtue of its industry-leading position to not only source highly attractive acquisition candidates but also support the acquired company’s future growth,” the IPO filing states.
The new SPAC will be led by Bob Sulentic, president and CEO of CBRE Group, and William Concannon, CBRE’s global group president.
The new entity is eyeing businesses that are “providing products or services to CBRE’s client base,” according to the regulatory filing. Within the commercial real estate space, it’s looking at companies that have a proven track record in outsourcing, digitalization, and data proliferation, as well as firms that offer services to support the health and wellness of its tenants.
Blank-check companies, which have no underlying assets, target companies for potential IPOs. The investment strategy has become increasingly popular this year. Last month, Tishman Speyer formed a $300 million SPAC that aims to merge with a proptech company. Real estate investors Joseph Beck and Thomas Hennessy are looking to raise $175 million for their second blank-check company, PropTech Investment Corporation II, that seeks to merge with a real estate tech company with an enterprise value of $500 million or more.
Though tech companies have been the target of many recent SPACs, CBRE’s filing does not specify that it wants to merge with one. The company, one of the biggest services firms in the commercial real estate space, has seen its business impacted by the pandemic; it recently laid off employees, and its income fell 10 percent during the third quarter.