JLL Completes $1.8B Acquisition of US Brokerage HFF

JLL has acquired Dallas-based brokerage HFF for a consideration of $1.8 billion, completing a merger that will boost its cross-border capital investment opportunities into and out of Asia Pacific, according to a company announcement.

The acquisition will bring JLL’s capital markets team to 3,700 professionals across 47 countries, with former HFF chief executive officer Mark Gibson becoming JLL’s chief executive officer of Capital Markets for the Americas.

The New York-listed property services company made the acquisition in a cash-and-stock deal that has given JLL shareholders 87 percent of the combined company and HFF shareholders the remaining equity, according to an earlier announcement.

With the deal now finalised, HFF’s common stock, previously trading under the ticker symbol HF, has ceased trading and has been delisted from the NYSE.

The merger will add HFF’s experience brokering deals in the US and access to assets in that market to JLL’s global business armoury.

“We are delighted to bring together JLL and HFF to create one of the most strategic, connected and creative capital advisors in the world,” said Christian Ulbrich, global chief executive officer of JLL.

The Dallas-based firm, which recorded a full-year transaction volume of $100 billion in 2018, is now wholly owned by JLL, with some services, such as equity placement and funds placement, continuing to operate under the HFF designation.

Adding Depth to US Investment Brokerage

In the statement, Stuart Crow, CEO of Asia Pacific Capital Markets for JLL, indicated that the acquisition would enable the company’s in the region to gain enhance access to cross-border investment opportunities thanks to the improved expertise, market coverage and access to deal flow that the acquisition would create.

Even before joining with JLL, HFF had already brokered at least three sales of US assets involving players from the Asia Pacific region over the last three years.

Just under a year ago, the company represented Iowa-based Principal Real Estate Investors and its consortium of South Korean partners in selling the Washington Harbour mixed-use project in Washington DC’s Georgetown area for cash compensation of $415 million.

In February 2017, HFF assisted Los Angeles-based developer The Ratkovich Company in selling a majority stake in its The Alhambra office campus in California to a partnership between Shanghai-based Future Land Development and Beijing-based investment management firm Elite International Investment Fund

In late 2017 the company also represented The Ratkovich Company, along with its partners from Penwood Real Estate Investment Management, in selling a famed Google facility to a Japanese corporate investor. That 28-acre facility, which started life as the hangar for Howard Hughes’ Spruce Goose seaplane was reportedly purchased by Iizuka-based conglomerate ASO Group for $270 million.

APAC Investors Take on Global Roles

HFF’s transactions involving Asian investors are part of a growing integration of Asia Pacific real estate markets with North America and Europe, which JLL hopes to capitalise on through its latest acquisition.

“Asian-based capital continues to diversify, notably into industrial and multifamily sectors, which accounted for close to 50 percent of total investment volumes since 2015,” JLL’s Crow said, adding that investors from Asia are also increasingly focusing on purchases of scale in the US.

JLL reported that from January 2018 to March 2019, Singapore, China, Japan and South Korea accounted for nearly 90 percent of active investment into the US.