Eastdil Splits from Wells Fargo in Temasek-Backed Management Buyout

Real estate investment bank and brokerage Eastdil Secured, which handled $243.5 billion of transactions last year, is poised to expand into Asia Pacific and Europe after securing a management buyout, according to a company announcement.

The New York-headquartered firm said that it had agreed to a management-led recapitalisation in partnership with Singapore sovereign wealth fund Temasek Holdings and institutional clients of US-based Guggenheim Investments that will split off the real estate investment brokerage from current owners Wells Fargo in a deal scheduled to be concluded by the end of 2019.

The agreement, which will see Wells Fargo sell the firm it bought 20 years ago, comes less than two weeks after the New York-headquartered company brokered the $18.7 billion sale of GLP’s US logistics assets to Blackstone.

Eastdil Eyeing Global Expansion

“The eagerness of our professionals to acquire a meaningful stake in the future of Eastdil Secured, alongside these preeminent investors, underscores our shared confidence in our firm’s people and future,” said Roy Hilton March, chief executive officer of Eastdil Secured. “Most importantly, through this transaction, we will be better able to serve our clients with investments in enhanced technology, a broader footprint and deeper global relationships.

Following the sale, the firm will be privately held, with Wells Fargo retaining a minority ownership interest and transferring its public market investment bankers to Wells Fargo’s corporate and investment banking division.

The US firm, which has only a small presence in Asia Pacific, said that the deal would strengthen its footprint in US commercial real estate capital markets, while supporting its growth in both Europe and Asia.

“Guggenheim Investments, on behalf of certain institutional clients, and Temasek represent ideal partners for Eastdil Secured as we embark on this next stage of growth,” March said.

Eastdil Secured will continue to be led by the same management team, with chairman Benjamin V Lambert, chief executive officer Roy Hilton March, and president D Michael Van Konynenburg all keeping their positions.

Eastdil Secured declined to disclose the terms of the transaction when approached by Mingtiandi.

Making Friends with Singapore’s Big Spenders

Through the firm’s new partnership with Singapore’s Temasek Holdings, Eastdil Secured will be sharing ownership with some of the key players in Singapore’s recent overseas spending spree.

The city-state was the biggest source of outbound investment from Asia in 2018, spending $21.6 billion overseas, accounting for 40 percent of the total $53.8 billion, with analysts expecting the trend to continue this year, according to a report by CBRE.

Only today, Temasek-backed Mapletree Investments closed its eighth deal in Europe with the purchase of an office development in Dublin for €240 million ($272 million), bringing the company’s total European expenditure to €1.49 billion.

Another Temasek-backed developer, CapitaLand, doubled its investment in the US in October last year with a single, $835 million purchase of a portfolio of multifamily properties from Starwood Capital, bringing the property firm’s US holdings to over $1.5 billion.

A month later, Singapore’s GIC announced that it had set up an A$2 billion ($1.44 billion) unlisted trust with Australian REIT, Dexus, to invest in logistics properties down under.

Handling Record-breaking APAC Outbound Investment

The brokerage has developed a forté for handling outbound investments from Asia Pacific in to the US and Europe, putting its name to several of the highest profile deals ever seen over the last decade.

In addition to the $18.7 billion Blackstone-GLP deal, Eastdil has been involved in at least three of the largest transactions globally in the past five years.

The company assisted vendors Landsec and Oxford Properties on the sale of London’s Cheesegrater office building in March 2017, which set a record at the time for the most expensive trade of a UK building, when it was sold to Chongqing-based developer CC Land for £1.15 billion ($1.46 billion).

Just four months later, the firm were in London again, representing Landsec and Canary Wharf Group in the £1.28 billion sale of the Walkie Talkie to Hong-Kong based oyster sauce maker Lee Kum Kee for £1.3 billion, beating the previous record set in March.

New York was the scene for another all-time high in October 2014 when Eastdil handled the sale of the Waldorf Astoria to state-owned Anbang Insurance Group for $1.95 billion, breaking the records for the largest acquisition of a US real estate asset by a Chinese buyer and the highest price paid for a US hotel in one fell swoop.