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Cushman Realty in Deal, Continues Shakeout Trend

Real estate: In latest example of industry consolidation, the L.A. brokerage agrees to be acquired by Cushman & Wakefield.

April 10, 2001|JESUS SANCHEZ | TIMES STAFF WRITER

The owners of Cushman Realty Corp. on Monday announced a tentative agreement to sell the prominent Los Angeles commercial real estate brokerage to Cushman & Wakefield Inc.

The deal, which had been the subject of widespread speculation, is part of an industry shakeout that has created huge, global real estate firms that offer a variety of services to large corporate clients. Not even Cushman Realty, which has brokered some of the nation's largest real estate deals, could remain independent in the face of the industry consolidation, observers said.

"We are going to try--even though we will be very big--to continue to be very agile and nimble," Cushman Realty President and Chief Executive John C. Cushman III said after announcing the deal.

Cushman, who co-founded the firm with twin brother Louis Cushman, is expected to be named chairman of Cushman & Wakefield's board of directors. Louis Cushman, who is based in Houston, is expected to be named vice chairman.

Under the deal, the Cushman Realty name would disappear and the firm's approximately 200 employees in 11 offices would be merged with Cushman & Wakefield's much larger organization, which includes about 9,000 employees worldwide. Company officials would not disclose the sales price or other financial terms between the two privately held companies.

The combination, which is subject to approval by both companies' boards of directors, would expand Cushman & Wakefield's presence in Los Angeles and give it access to Cushman Realty's prestigious roster of corporate clients. Cushman Realty recently was commissioned by Seattle-based Boeing Co. to help select a new headquarters location.

Cushman & Wakefield was founded near the turn of the century by John and Louis Cushman's grandfather and great uncle. The two brothers worked for Cushman & Wakefield until establishing their own firm in 1978.

"Cushman Realty represents to us a very unique opportunity . . . because of the caliber of talent," said Cushman & Wakefield President Arthur J. Mirante II, who will lead the combined companies.

The firms have discussed a merger for a decade but only recently came to acceptable terms.

Following the industry consolidation trend, Cushman & Wakefield--which is owned mostly by a subsidiary of Japan's Mitsubishi Estate Co.--has been bulking up by purchasing brokers and a variety of other real estate service firms over the years. In December, Cushman & Wakefield acquired Matlow-Kennedy Commercial Real Estate Services, a Long Beach-based firm with 16 brokers active primarily in the South Bay, Long Beach and Orange County.

Real estate firms such as CB Richard Ellis, Kennedy-Wilson, Insignia/ESG and Trammell Crow also have been active in buying brokerage, property management and real estate related services firms.

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