Commercial real estate services firm Colliers International said that it has completed its 'transformational' investment in US-based investment firm Harrison Street Real Estate Capital with the purchase of a 75% stake for $550 mln (€460 mln).
Headquartered in Chicago, with an office in London, Harrison Street Real Estate Capital is one of the largest real estate investment firms dedicated to the education, healthcare and storage sectors with $14.6 bn in assets under management.
Under the terms of the transaction, Colliers has acquired 75% of Harrison Street from its founders for $450 mln, with an additional $100 mln payable in 2022, based on the company achieving certain accelerated performance targets. The senior management team of Harrison Street holds the balance of the equity.
Harrison Street’s co-founder and chief executive officer, Christopher Merrill, continues to serve as CEO, leading the operations and remaining the largest individual shareholder.
Harrison Street’s senior management team continues to operate the firm’s day-to-day business.
Important new platform
'Closing of the Harrison Street transaction establishes Colliers International as one of the major players in global real estate investment management, provides an important new platform for growth and facilitates the integration of our existing real estate investment management operations in Europe,' said Jay Hennick, Chairman and CEO of Colliers International. 'Our enterprising culture and partnership driven business model aligns perfectly with Harrison Street, which brings an exceptional group of leaders to our organisation and a company with a proven track record of success spanning a broad spectrum of significant accomplishments.'
'The addition of Harrison Street will not only provide an attractive business for future growth and capital deployment, it will also strengthen our cash flow and earnings,' said John Friedrichsen, Chief Financial Officer of Colliers International. 'Beginning with the third quarter, we will update our segmented reporting to separately disclose our new investment management services platform comprising the results of Harrison Street as well as our existing European investment management business. Together, this new segment will have more than $20 bn in assets under management from the world’s most respected institutional real estate investors.'
'We are excited to hit the ground running with Colliers, leveraging our respective track records of success, enterprising cultures, and focus on client service. As part of Colliers’ global platform, we will provide our investors and employees greater stability and significant growth opportunities in the future,' said Christopher Merrill, CEO of Harrison Street.