Cushman & Wakefield Tests Real Estate Market With IPO

After more than a year-long wait, Cushman & Wakefield is going public with plans to raise $810M in an initial public offering that would value the full-service commercial real estate firm at around $6B, including debt.

The company plans to offer 45 million shares and expects the launch to price between $16 and $18 a share, according to a regulatory statement filed Monday, the Chicago Tribune reports. 

Global giants CBRE, JLL, Colliers International and Newmark Knight Frank have market caps totaling $16.3B, $7.7B, $3.2B and $2.2B, respectively. Should the offering go as planned, C&W would become the third-largest publicly traded commercial brokerage in the country. 

As commercial brokerages outperform their REIT peers on the market and enjoy soaring share values due to the global expansion of their underlying business models — which has boosted commission and property management fees — C&W is hoping to cash in on the bull market. 

Rising concerns about the unusually long length of this real estate cycle could dampen investor sentiment about the company’s future performance. The firm has reported net losses in the past few quarters, which also could factor into the launch, the Wall Street Journal reports. 

In 2017, C&W reported a net loss of $221M for the full year, according to public documents filed with the Securities and Exchange Commission in June. In the first quarter of the year C&W took a net loss of $92M. Revenues for 2017 came in at $6.92B, roughly half of CBRE’s $14.2B and less than JLL’s $7.9B in revenue during the same period, according to WSJ. As of March 31, C&W had about $3B in debt, exceeding the debt levels at both CBRE and JLL. 

The Chicago-based brokerage, owned by an investment group under the TPG umbrella, was founded in 1917. The TPG affiliate acquired C&W for about $3.5B in 2015, merging the firm with peers DTZ and Cassidy Turley, WSJ reports.