Wall Street will soon have a new real estate company joining all the other publicly traded companies, and this company’s a big one.
Cushman & Wakefield has filed for an initial public offering. The Wednesday filing shows that the company is betting on the continued growth of commercial real estate around the world and greater participation from institutional investors in the property market, Business Insider reports.
The company could seek to raise about $1 billion in the IPO and seek a valuation in excess of $5 billion, according to people familiar with the deal who spoke to The Wall Street Journal, though pricing of the deal can change until a company prices its IPO.
One of the reasons the company, which employs 48,000 people throughout 70 countries, wants to offer itself to the public is so it can use the expected proceedings of the IPO to slash its debt. As at the end of March, the company had over $3 billion in long-term debt, the filing showed.
Cushman & Wakefield employs about 48,000 people worldwide and operates in 70 countries. Its revenue has grown every year since 2015 and totaled $6.92 billion in 2017, the filing showed. It operated at a loss of $220.5 million last year.
DTZ Jersey Holdings, a European brokerage backed by the private-equity giant TPG Funds, bought Cushman & Wakefield for $2 billion in 2015. It has made other acquisitions to become one of the largest commercial-real-estate firms in the world, Business Insider reports.
Key risks to the company’s business include tighter lending conditions, which would make it harder to invest in commercial properties, and difficulty in paying down debt, according to the filing.
The Real Deal earlier reported that the company had for a few years been speaking to bankers and advisers about an IPO.
Cushman & Wakefield’s IPO filing follows its fellow commercial brokerage Newmark Knight Frank’s December listing. The stock in reference peaked at $16.66 in late January but is still up nearly 9 percent from its debut, Business Insider reports.
Morgan Stanley is the lead underwriter for Cushman & Wakefield’s IPO, alongside JPMorgan, Goldman Sachs, and UBS, Business Insider reports.
A Cushman spokesman declined comment to The Wall Street Journal beyond the registration statement it filed with the Securities and Exchange Commission.
Cushman & Wakefield’s owners, an investment group led by private-equity firm TPG, purchased the firm and several other commercial real estate businesses in 2014 and 2015 for more than $3.5 billion, The Wall Street Journal reports. The group wants to create a global power that would compete with CBRE Group Inc.
The commercial property brokerage business has been strong in recent years thanks to economic growth in many parts of the world that’s fueled demand for office, retail and industrial space, according to The Wall Street journal, which adds that sales activity also has been high as investors seek assets with higher yields than bonds and less volatility than stocks.
By: Mason Forman