Pennsylvania-based property adviser HFF is preparing to break into the UK market.
Although the New York-listed firm has yet to make any formal commitment to the UK, it has had preliminary talks with several boutique firms about takeovers, and with high-profile agents and advisers about potential positions.
The firm is likely to recruit a local team with a thorough understanding of the UK market. It has been considering expansion across the Atlantic for as long as a decade but has stepped up its pursuit in recent months.
Its latest annual report for 2015 hints at expansion, saying: “We believe that opportunities exist to strategically establish and increase our presence in several key domestic, and potentially international, markets.”
It will follow US brokers Avison Young, Coldwell Banker and Eastdil Secured, which have all broken into the UK advisory market over the past three years.
HFF competes directly with Eastdil in the business it targets and will have been enticed by Eastdil’s success since it entered Europe in 2013.
HFF’s analysis of the UK market suggests that local investors are now more accustomed and attracted to investment banking-style hybrid services.
When Eastdil first arrived in London, it made a name for itself by having a fresh take on the established world of UK agency by bringing an investment banking approach to property broking and found instant success in a highly active non-performing loan market – one that has since slowed down and that HFF would likely now find harder to break into.
To compete for the largest and more complex deals, the UK agency establishment had to react quickly and increase its expertise in investment banking and debt advisory services.
CBRE and JLL expanded their corporate finance and capital markets client services by making key industry hires.
JLL recruited a new head of debt to its corporate finance team, Christopher Holmes, former managing director of structured real estate and finance at UniCredit Bank. It later poached John O’Driscoll from Deutsche Bank to head its M&A EMEA team.
CBRE similarly bolstered its financial expertise by appointing Steve Williamson to its real estate finance division. Williamson joined from Deutsche Bank and spearheaded the firm’s financing ambitions as head of debt origination. It then hired Richard Dakin from Lloyds Banking Group, where he was head of the business support unit, as managing director of its Capital Advisors division.
HFF – Holliday Fenoglio Fowler – has closed more than $450bn (£346bn) of transactions since its foundation in 1998. In the first six months of this year it was the third-largest investment adviser in the US, with a 12.9% market share.
HFF mainly acts on the sale side of transactions and presents itself as an investment bank targeting complex transactions, rather than a property agent. It does not advise on leasing. Services include raising debt, investment sales, valuation, equity placement, and loan sales and servicing. It works across all asset classes, but its largest deals are in the hotel, multi-housing (PRS), office and retail sectors.
Other US brokers looking to take UK firms’ lunch money
Eastdil Secured
Since landing in the UK in 2013, Eastdil has been the most disruptive force in real estate advisory for decades, taking substantial market share and blurring boundaries between investment banking and agency work.
Avison Young
This US agent acquired London-based commercial real estate services firm Haywards in 2014 and opened new offices in London’s West End and the Thames Valley. In January it expanded into the Midlands with the acquisition of North Rae Sanders.
Coldwell Banker
Coldwell Banker Commercial was set up in the UK in July and appointed Gregor Wallace from BNP Paribas Real Estate’s London investment team as managing director.
Biggest deals
$2.7bn Advised Blackstone on the sale of the $2.7bn CarrAmerica, Trizec and Equity Office portfolio, which was bought by GE Real Estate and Tishman Speyer in 2007. The portfolio comprised 15 offices totalling 11.2m sq ft in Chicago.
$6.5bn Acted for Morgan Stanley on its 2007 purchase of Crescent Real Estate company for $6.5bn. The deal included 54 office buildings totalling 23m sq ft across US cities such as Dallas, Denver, Miami and Las Vegas.
HFF leadership
Mark Gibson, chief executive
Joe Thornton, president
Gregory Conley, chief financial officer
Nancy Goodson, chief operating officer
Key activity
$34.1bn investment sales ($29bn 2014)
$38.2bn debt placements ($32.1bn 2014)
$48.7bn loan servicing ($39.3bn 2014)
US brokers league H1 2016 by transaction value ($m)
| Rank | Broker | Office | Retail | Multi-family | Industrial | Hotel | H1 total | Market share (%) | Change on H115 (%) | |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Eastdil Secured | 18,053.9 | 3,931.5 | 968.2 | 310.3 | 1,865.2 | 25,129.1 | 25.1 | -20 | |
| 2 | CBRE | 8,174.1 | 2,129.5 | 9,512.1 | 2,665.5 | 561.9 | 23,043.1 | 23 | -6.4 | |
| 3 | HFF | 3,970.6 | 2,222.8 | 6,008.8 | 214.2 | 504.9 | 12,921.3 | 12.9 | 18.7 | |
| 4 | JLL | 2,541.9 | 1,175 | 2,202.4 | 984.3 | 1,507.8 | 8,411.4 | 8.4 | -33.4 | |
| 5 | Cushman & Wakefield* | 3,635.7 | 436.3 | 1,997.9 | 970 | 400 | 7,439.9 | 7.4 | 313.1 |
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