JLL Sees Boost in Brokerage Mergers as Clients Get Bigger

(Bloomberg) -- More commercial real estate brokerages are poised to acquire their competitors in coming months as the industry accommodates investors with bigger pocketbooks and global ambitions, according to the chief executive officer of Jones Lang LaSalle Inc.

“The overall industry is on a consolidation path,” JLL CEO Christian Ulbrich said in a phone interview. “It will probably even accelerate over the next couple of years because our clients are getting bigger.”

Real estate investors overseeing increasing pools of money must spread their capital across the globe because there are few countries big enough to warrant devoting all of one's funds, he said. That means they need brokerages with an international presence.

“There are many of those fund managers out there who have more than $5 billion assets under management,” Ulbrich said. “And if you invest more than $5 billion, you have to go across various markets.”

On Monday, JLL completed its acquisition of Dallas-based brokerage HFF Inc. for about $1.8 billion. The deal significantly bolsters JLL's capital-markets business, bringing its team in that division to more than 3,700 employees across 47 countries, according to a statement. The CEO expects “very little” attrition as a result of the transaction.

Ulbrich said there's still room for expansion in Chicago-based JLL's corporate solutions business, which helps companies across industries manage their real estate portfolios and adapt to changes in the workforce.

“That is an area where we see tremendous growth potential,” he said.

JLL appointed Deborah McAneny, a former HFF board member and chief operating officer of Benchmark Assisted Living, and former TransUnion CEO Siddharth Mehta, as independent directors, according to a statement Tuesday.

To contact the reporter on this story: Lily Katz in New York at lkatz31@bloomberg.net

To contact the editors responsible for this story: Debarati Roy at droy5@bloomberg.net, Rob Urban

©2019 Bloomberg L.P.