This Week in CRE History: Cushman & Wakefield Acquires Massey Knakal
One year ago, Cushman & Wakefield announced its plans to acquire Massey Knakal for about $100 million, signaling a consolidation of NYC CRE power.
Massey Knakal Realty Services was founded in 1988 by Paul Massey and Robert Makal. Over the next 25 years, Massey Knakal had become known as the boutique brokerage firm that dominated the market for midsize office, retail and apartment buildings in New York City. The firm had built a market-specific empire, controlling approximately 20% market share of the lucrative middle of New York’s CRE sales market. The sales generated about $15 million in revenue each year.
As a result, when the firm hired Perella Weinberg Partners to oversee a transaction — either for a noncontrolling 49% stake or for the whole business — more than 10 companies expressed interest in buying Massey Knakal. Many of the usual strategic buyers were rumored to be on the list, including DTZ, CBRE, and — of course — Cushman & Wakefield.
There were expectations that the company could fetch about $100 million from one of these suitors. Not only was the company inherently valuable, the transaction was ideally timed. The total volume of New York City commercial property sales in the first three quarters of 2014 was nearly $39 billion, more than the figure for all of 2013.
After a month of closed conversations, it was announced that Cushman & Wakefield would be the final buyer, paying roughly $100 million for the company. CushWake’s press release cited “a more formidable Capital Markets presence in the New York Tri-State region” as the primary driver of the acquisition.
Although significant because of its considerable price tag, Cushman & Wakefield’s acquisition of Massey Knakal would be one of many M&A deals that had overtaken the CRE industry in 2014 and 2015.