Jones Lang LaSalle Incorporated (JLL - Free Report) recently revealed a deal to acquire Strategic Advisory Group (SAG) in a move to boost its reach in the broader hospitality sector.
Founded in 1998, SAG is a provider of a full range of development advisory services that include asset management, tourism strategy and marketing, contract negotiations, and public-private partnership structuring to public entities. Importantly, in the hospitality industry, the public sector plays a crucial role as it offers strategic investments on which the private sector can bank upon.
SAG has been known for helping with strategic planning for over 200 destinations across the U.S. and abroad. Presently, the company is advising on the $615 million convention center renovation and expansion on Miami Beach.
Slated to close in the coming weeks, the SAG acquisition seems to be a strategic fit for JLL as it would boost the latter’s service offerings in the public sector and tourism expertise. The takeover will also allow JLL to add SAG’s skills and knowledge, thereby improving its overall growth platform.
Notably, JLL's Hotels & Hospitality Group closed deals worth more than $48 billion in the past five years and has accomplished around 4,500 advisory, valuation and asset management assignments.
Of late, JLL has been on an acquisition spree. Prior to the announcement of the SAG deal, the company revealed the buyout of tenant-focused real estate firm, Cresa South Florida.
In fact, during the first 9 months of 2015, the company completed as many as 12 acquisitions in Australia, Canada, England, Germany, Japan, Poland, Sweden, Turkey and the U.S. (Read more: JLL’s Acquisition Drive Continues). Going forward, we believe that such strategic acquisitions will help the company capitalize on the improving market environment.
Importantly, aided by robust growth in fee revenues, JLL reported an earnings surprise of 29.23% in the third quarter of 2015. The company currently carries a Zacks Rank #2 (Buy). Moreover, the stock has a Zacks Growth Style Score of ‘A’, reflecting its solid growth potential. According to our style score system, a stock with a favorable Zacks Rank and Zacks Growth Style Score of ‘A’ (or ‘B’) is highly desirable.
Other well-ranked stocks in the real estate space include Henderson Land Development Co. Ltd. (HLDCY - Free Report) , CBRE Group Inc. and Reis, Inc. . All three stocks have the same Zacks Rank as JLL.
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