Commercial Real Estate Blog

Jones Lang LaSalle (JLL) has completed the acquisition of Staubach. The terms of the agreement were covered previously in this post.

We previously reported that the deal was essentially done, but Jones Lang LaSalle (JLL) confirmed today that it is in fact buying Staubach. Jones Lang LaSalle is paying $613M for Staubach over 5 years, with $100M in stock and $123M in cash up front at the closing. An additional $114M in earnouts will be paid to Staubach depending on whether it meets certain performance goals, bringing the total acquisition price potentially to $727M.

The deal is expected to close by the third quarter. The acquisition caps on and off rumours of an acquisition. We indicated on June 9th that it was a done deal, and more details trickled in over the following week.

Globe Street is reporting that the Staubach and Jones Lang LaSalle (JLL) merger will be announced as early as today. They are also reporting that the acquisition price (of Staubach) is $835M, a $100M more than was previously reported.

Update (6/16): Forbes is also reporting that the merger will be announced as early as today, except they are reporting a that Jones Lang LaSalle is buying Staubach for $735m.

A little less than a week ago we reported that the rumours of Jones Lang LaSalle (NYSE: JLL) merging with Staubach were true, or so we had heard. Today, Property Week News out of the UK is providing additional credence by publishing a price for the acquisition, $735M.

Property Week’s article indicates that the acquisition price represents a 10x multiple on Staubach’s EBITDA, and a 1.8x multiple on revenues.

No formal announcement has been made, but it seems imminent from what we heard. And from what Property Week is publishing, it will be announced as early as next week. Jones Lang LaSalle and Staubach have refused to provide any comment on the merger rumours.

The deal would represent a smaller acquisition for JLL than the Trammell Crow deal it had chased, but lost to lose it to CBRE.

Though likely not surprising to anybody, year over year investment sales both in the United States and on a worldwide basis are down dramatically. According to a Jones Lang LaSalle (NYSE:JLL) report cited by NREI, first quarter investment sales in the US came in at $39.2 Billion, a number which is down 69% from the year ago period.

Internationally, investment sales during the first quarter were $154 Billion, which is down 46% less than the $283 Billion number from a year ago. This statistic was provided by Real Capital Analytics.

There is a lot of money currently waiting on the sidelines to acquire assets, but for the time being sellers are not conceding much on price. That might change though over the course of the next one to two years as loans mature. As Macklowe Properties found out, refinancing a short term loan in this market is difficult to do. If owners don’t can’t meet the heightened equity requirements currently facing those looking to acquire or refinance assets, they might be forced to sell.

It seems that the rumors swirling around a possible merger between Jones Lang LaSalle (NYSE: JLL) and Staubach are true. We’ve heard from a reputable source that the deal is essentially done.

The transaction would create a corporate real estate giant to better take on CBRE, the largest corporate real estate provider. The merger however could be potentially difficult to reconcile as Staubach has most of its business on the tenant side, and JLL, while strong on the tenant side, has a lot of its business on the landlord side of the equation.