JONES Lang LaSalle Inc, the world's second-largest commercial real estate broker, will buy the Staubach Co for US$613 million to expand its tenant-representation business.
Jones Lang will pay US$123 million in cash, US$100 million in stock and the balance over five years in cash, the companies said on Monday in a statement obtained by Bloomberg News. Dallas-based Staubach, founded by former National Football League star Roger Staubach, helps tenants find office, retail and industrial space.
The purchase may help Jones Lang counter anticipated declines in commissions from commercial property sales. Global real estate investment is expected to fall 30 percent in 2008, Jones Lang estimated in March.
While commercial office rents continue to rise in London, Moscow and New York, the world's biggest financial firms have curtailed lending amid at least US$379 billion in mortgage-related losses and writedowns.
"It gives them a significant boost in the corporate real estate arena," said Michael Dow, president of CresaPartners LLC, a Boston-based commercial broker specializing in tenant representation. "Strategically it's a smart move." CresaPartners competes with Staubach.
Dow believes his firm will benefit as Jones Lang absorbs Staubach.
"We are planning on growing the business dramatically and we need all the folks we can get," said Peter Roberts, Jones Lang's CEO for the Americas.
"It's a pretty powerful merger and a pretty powerful marriage."
Roger Staubach will join the Jones Lang board and take the post of executive chairman, Americas.