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NEW YORK CITY-After the recent $630 million Jones Lang LaSalle and Staubach Co. union, the wave of mergers among real estate service firms seems to be continuing. Up next, and expected to close “within a month,” is said to be a Colliers International purchase of locally based GVA Williams for an undisclosed amount.

An anonymous industry source, who is not involved in the potential deal, tells GlobeSt.com that the talk of this particular merger is “pretty strong,” and came as no surprise. “Lots of people are hearing the same thing and we are hearing it loud and clear,” the source says. The source says that all the big players are always talking about consolidating their platform to make it stronger.

Finnegan

Colliers did not return GlobeSt.com queries by deadline for confirmation or further comment. GVA did not return GlobeSt.com queries by deadline for confirmation or further comment, however in a prepared statement by GVA Williams’ CEO Robert Freedman, he says that “in order to provide our local, national and international clients with best-of-class services, GVA Williams routinely explores ways to grow our business. To do otherwise would be a disservice to our shareholders, employees and clients.” The statement continues that “it is our policy to disclose details of business deals only at their successful conclusion and not to address speculation and rumors.”

The attraction of GVA to Colliers is most likely that it has a national platform, the source says. “The overall motivation is difficult to understand, but in New York, GVA is a better fit for Colliers platform.” Abrams Benisch & Riker, the Manhattan affiliate of Colliers International, otherwise known as Colliers ABR, is the big question, the source says. “I have no idea what would happen to ABR.”

GVA Williams does export a lot of corporate business, that is not Colliers ABR’s motivation, the source says. “The way Colliers International works is that ABR is a franchisee and there is no ownership link, so it would stand on its own in New York.”

The source points out that with firms such as with Staubach, there is a clear identity, but that is not the case with these two firms. “We have seen this type of thing cross all professions,” the source says. “You have to be known and be big at what you do…it is difficult to be in the middle.” The source continues that these two firms are alike in some sense; they both have a cultural identity that isn’t really known, therefore it is difficult to dominate in today’s market. “This is more of a story of a merger between two mid-sized companies.”

Consolidation isn’t necessarily a good thing for tenants, and it also is not a given that a merger will be a good thing for the companies merging, or that it will make them better; “there is no guarantee.

“Colliers needs a better platform that feeds the Colliers network and the Williams brokerage part can do that,” the source says. There will probably be some restructuring within GVA as well as Colliers. “The Williams part of GVA will most likely be split to the ownership/family side and the other part being brokerage,” the source says.

Hugh Finnegan, an attorney in the real estate group at Sullivan & Worcester LLP, who is not involved in the potential deal, tells GlobeSt.com that a merger such as this combination is part of a trend of combining forces and broadening the spectrum of real estate pieces. Strong groups are combining to make stronger groups and so on, he says.

Finnegan says that these types of mergers might not be widely embraced internally. “The broker culture makes integration difficult, particularly in a city where offices that competed with each other last week are now supposed to support each other,” he says. Finnegan explains that he does notice some desirability for industry consolidation. “There is some trend toward consolidation–for example, the Cushman & Wakefield/Sonnenblick-Goldman. The one-stop shopping and global reach concepts are colliding.”

Although Finnegan does not know who might be next up to the merger plate, he says that the number of choices for tenants to look to gets reduced after mergers. “The tenants are adversely impacted,” he says, “especially the smaller tenants.”

Finnegan says that JLL/Staubach or GVA/Colliers-type unions are “like law firm mergers, which really are acquisitions of rainmakers and not mergers.” He notes that when companies look to merge with other companies, “the attraction would need to be complementary practice areas so the diversity of skills makes the new firm more attractive to their clients.”

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