Commercial real estate brokerage mergers are relatively rare and challenging to pull off. But a hypothetical merger between JLL and Cushman & Wakefield could potentially have a huge upside for both companies. That’s according to a recent analysis from Raymond James analyst Patrick O’Shaughnessy, who wrote in a note to clients that a JLL-Cushman merger could provide “meaningful strategic benefits” to both firms.
The report noted the merger would offer a 20 percent increase in JLL’s earnings per share if it acquired Cushman. The analyst also estimated that JLL would pay a 50 percent premium to Cushman & Wakefield’s stock price if the theoretical merger happened. JLL is the second-largest, and Cushman is the third-largest brokerage by revenue in the commercial real estate industry. The post said a merger between the two firms would create a company that “would approach the size of” the industry’s largest brokerage, CBRE.
It’s important to note the Raymond James analysis was purely theoretical, and neither JLL nor Cushman have indicated an explicit interest in such a deal. But the report also said “both firms are generally open to the idea of consolidating M&A,” and rumors around a merger between the companies did swirl in 2020. I wrote earlier this year about the persistent rumors of a Cushman & Wakefield-Newmark merger, though Newmark CEO Barry Gosin shot them down over the summer. A mega-merger between two firms like JLL and Cushman & Wakefield would undoubtedly shake up the commercial real estate industry, but for now, the talk is hypothetical.