Get bigger and go global, or go local and specialize by serving a specific niche or providing high-touch service appears to be the trend among companies in the business services sector, including those providing commercial real estate services to other businesses.
With the largest CRE companies increasingly on the hunt for external growth opportunities and mid-market firms under rising competitive pressure to sell or merge in order to maximize their service footprint and grow market share, several experts predict that a new round of mergers and acquisitions in the commercial real estate services sector may accompany increasing commercial real estate transaction volume.
The announcement this week by Grubb & Ellis Co. (NYSE:GBE) that is it has hired San Francisco-based investment banking firm JMP Securities to explore strategic alternatives for the company, including a potential sale or merger, provides the latest sign of changes rippling through the CRE brokerage services market.
Despite improved leasing and sales volume, Santa Ana, CA-based Grubb & Ellis’s share price fell to its 2011 low of 98 cents on Friday, March 18, down from the 52-week high of $2.27 on April 14, 2010.
With the economy and real estate market on the upswing, the company said in its filing and press release that the timing is right to explore the possibility of selling itself or merging with another company.