The dust hasn’t yet settled on Jones Lang LaSalle’s $613 million acquisition of commercial real estate giant the Staubach Company. But local brokers are already speculating about the impacts of consolidation on South Florida markets.
After the deal closes in the third quarter, both companies are convinced the merged organization, which will operate under the Jones Lang LaSalle banner, will reinforce global growth and build its position in key U.S. markets.
“We believe the combined company will be a large force in the South Florida market that will garner more business collectively than we would have won separately,” said Scott Bell, senior vice president for Jones Lang LaSalle in Florida. “It will create an exciting time in the marketplace.”
Jones Lang LaSalle has only two locations in South Florida – one in Fort Lauderdale and one in Coral Gables – and only four Florida locations in all. Staubach also has offices in Miami and Fort Lauderdale. So the merger would double the Jones Lang presence in the region.
The merger doesn’t intimidate Keith Kidwell, principal of Sperry Van Ness/Kidwell-Byron in Fort Lauderdale. The acquisition may give Jones Lang LaSalle a slight competitive edge, creating a more unified front in the region, Kidwell said. But he said he’s not expecting other commercial brokerages to feel any pain.
“Jones Lang LaSalle will definitely be a bigger force, but they haven’t yet announced any plans to expand in South Florida,” Kidwell said. “It’s always a possibility that some of the brokers at these firms will leave and go out on their own in the wake of the merger.”
Deidre Newton, president of Community Real Estate Services, a commercial real estate brokerage in West Palm Beach, has a more positive spin: The merger of two large companies will help both the brands on a large scale – but the local niche boutique firms will see the bigger boost from the merger.
“For a larger markets like Miami or Ft. Lauderdale, the merger will mean more exposure in the short term” for brokers, Newton said. “In today’s real estate market clients are seeking out local knowledge for site specific areas like West Palm Beach, Jupiter, and Lake Worth.”
Newton points to the residential real estate brokerage NRT’s string of purchases of residential firms in several years ago, which included Manhattan’s the Corcoran Group and Sotheby’s International Realty. It was good for the short-term growth for NRT, but niche firms can win out with customer service. Larger firms tend to term customers as “just another listing,” she said.
Bell of Jones Lang LaSalle is betting the acquisition will make it a competitive force to be reckoned with by offering a more complete brokerage.
The Staubach Company is recognized for its tenant representation expertise while Jones Lang LaSalle is known for its corporate solutions, facility management services, and energy and sustainability services business and global platform. The companies want to take the lead in public sector services, industrial brokerage, capital markets, and project and development services. They also want to expand into law firms, health care, banking, logistics, life sciences, non-profits, data centers and contact centers.
“We are in a competitive business, a service business where people are a big factor,” Bell said. “We think our combined merged operation will have some of the best people in the market. In our view, it could make it difficult for some of our competitors.”