CRE services powerhouse Colliers has entered into a definitive agreement to acquire a 65 percent stake in Rockwood Capital LLC, a U.S. real estate investment management firm with more than $12 billion of assets under management.
The deal is subject to customary closing conditions and approvals and is expected to close in the third quarter. Financial terms were not disclosed.
The balance of Rockwood’s equity will be retained by the company’s senior leadership team, who will continue to lead the business under the “perpetual partnership” model with Colliers. On completion of the transaction, Colliers expects the annual run rate of management fee revenue to be between $70 million and $75 million, with “significantly accretive” operating results.
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Rockwood engages in equity and credit investments across multifamily, office, mixed-use, life science, hospitality and retail properties across North America and invests across the capital stack through a series of closed-end value-add, core/core-plus, credit and long-term development vehicles.
In a prepared statement, Zach Michaud, Colliers’ co-chief investment officer, said the partnership will expand the company’s operations in the U.S. and add several new asset classes and strategies, “including excellent capabilities in the rapidly growing real estate credit space.”
Colliers Chairman & CEO Jay Hennick added that the investment in Rockwood demonstrates the company’s continued focus on building scale, noting that Colliers will have a combined $77 billion in assets under management once all announced transactions are completed.
David Becker, a Rockwood managing partner, highlighted Colliers’ “decentralized operating model, significant inside ownership, and impressive performance over many years” as helping to motivate the deal.
Berkshire Global Advisors was financial advisor and Kirkland & Ellis was legal advisor to Rockwood. Sidley Austin was Colliers’ legal advisor.
The spice of life
A couple of recent transactions illustrate Rockwood’s eclectic appetite.
Last September, Rockwood acquired a three-building, 148,500-square-foot Class B office campus in metro Seattle for $84.1 million. The seller of the 9-acre property in Bellevue, Wash., was Principal Real Estate Investors, of Des Moines.
Late last year, Rockwood also bought a 49 percent stake in a trophy office property at 655 New York Ave. NW in Washington, D.C. The 756,000-square-foot asset was recapitalized by owners Douglas Development and a Brookfield Asset Management fund. Financials were not disclosed.