Colliers Closes $550M Harrison Street Investment
Colliers has acquired 75% of Harrison Street, with the senior management team of Harrison Street owning the balance of the equity.
CHICAGO–Colliers International Group has closed on its previously-announced strategic investment in Harrison Street Real Estate Capital.
Under the deal Colliers has acquired 75% of Harrison Street, with the senior management team of Harrison Street owning the balance of the equity. Colliers has paid the founders $450 million for the stake, with an additional $100 million payable in 2022, based on the company achieving certain performance targets. Colliers expects the annual run rate of management fee revenue to be between $100-$115 million and to be materially accretive to its adjusted EBITDA, adjusted net earnings and adjusted earnings per share for the balance of 2018 and annually thereafter.
Starting in the third quarter, Colliers will update its segmented reporting to separately disclose its new Investment Management Services platform that will consist of Harrison Street’s results as well as its existing European investment management business.
Indeed one of the drivers of this deal was to facilitate the integration of Colliers’ existing real estate investment management operations in Europe. Jay Hennick, Chairman and CEO of Colliers International, in a prepared statement called Harrison Street “one of the major players in global real estate investment management.”
Headquartered in Chicago with an office in London, Harrison Street has approximately $14.6 billion in assets under management. Colliers’ 2017 corporate revenues totalled $2.3 billion and $2.7 billion when affiliates were included.