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CBRE Group on Acquisition Spree, Buys Noveen Consulting

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CBRE Group Inc. (CBRE - Free Report) is on an acquisition spree. Recently, the company announced the acquisition of a consulting firm focused on serving healthcare facility owners named Noveen Consulting.

Prior to that, CBRE Group announced the buyout of CB Richard Ellis-N.E. Partners, L.P. (CBRE/New England). It was a joint venture with Whittier Partners Group and the largest full-service commercial real estate services operation in New England.

Based in Louisville, Kentucky, Noveen Consulting offers facility condition assessments, commissioning, energy management, facility optimization, and technology consulting & implementation strategies. Its acquisition is a strategic fit as CBRE Group’s healthcare capabilities get a boost and the company will have a competitive advantage amid rapidly evolving environment for the healthcare providers. Notably, Noveen Consulting and its team of experts, led by Deljoo, will come on board and be part of the project management line of business within CBRE Group.

On the other hand, the acquisition of New England JV marks the company’s second attempt to enhance its New England platform this year. A sizeable group of top commercial real estate professionals from Transwestern, headed by Steve Purpura, already joined CBRE Group in February.

Per the Boston Business Journal, with 12.3 million square feet of leasing transactions in Massachusetts accomplished during 2017, CBRE/New England’s operations achieved top spot in the year. For the latest acquisition, though the CBRE/New England leadership team and specialists will join CBRE Group on an immediate basis, the CBRE/New England brand will be retained until the year end.

Notably, CBRE Group has banked on strategic in-fill acquisitions to widen its geographic coverage, as well as expand and reinforce service offerings. The company focuses on acquiring regional or specialty firms which complement its existing platform, as well as independent affiliates in which, at times, it holds small stakes. Furthermore, the company opts for larger, transformational deals driven by macro policies.

In fact, the company’s M&A activity increased in 2017 and it made 11 acquisitions. Such buyout efforts continued in 2018 as well and the company made three acquisitions in the second quarter, with the most notable being FacilitySource, which is a leader in technology-based procurement and facility management solutions in the United States. As market conditions continue to improve, we believe these opportunistic acquisitions and strategic investments will likely serve as growth drivers, supplementing its organic growth.

Further, with an increasing trend of real estate occupiers turning to outsourcing and its market-leading position, CBRE Group remains well poised to continue experiencing a flourishing trend in this business line.

Currently, CBRE Group carries a Zacks Rank #2 (Buy).

The company’s shares have increased 8.9% year to date against its industry’s decline of 4.1%.


Other Key Picks

Investors interested in the real estate industry can also consider some other top-ranked stocks like Colliers International Group Inc. (CIGI - Free Report) , Consolidated-Tomoka Land Co. (CTO - Free Report) and Deutsche Wohnen SE . While Colliers International Group flaunts a Zacks Rank of 1 (Strong Buy), Consolidated-Tomoka Land Co. and Deutsche Wohnen carry a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Colliers International’s Zacks Consensus Estimate for 2018 earnings moved 3.9% north to $3.74 in two months’ time.

The same for Consolidated-Tomoka Land Co. inched up to $8.24, over the past two months.

The current-year earnings estimate for Deutsche Wohnen remained unchanged at $1.58 in the past week.   

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