Two private equity firms backing Cushman & Wakefield's rise to becoming the world's third-largest commercial brokerage are seeking to sell their ownership stake in the behemoth only weeks after the real estate services firm reported a first-quarter loss.
The Chicago-based real estate services firm noted the offering in a prospectus filed with the Securities and Exchange Commission on Monday, outlining plans for TPG and PAG Asia Capital to sell their outstanding shares of Cushman & Wakefield totaling 26,513,041 ordinary shares. The shares listed in the prospectus are valued at $310.7 million, based on Friday's closing cost of $11.72 per share.
If TPG and PAG can successfully complete the public offering, the two entities will have virtually no ownership in Cushman & Wakefield. Currently, TPG Group Holdings, with a co-headquarters in Fort Worth, Texas, and San Francisco, has 17,098,001 shares in the firm and PAG has 9,415,040 shares in the company, according to the prospectus. The selling shareholders include funds affiliated with TPG and PAG Asia Capital.
The proposed sale of the two firm's ownership stake in Cushman & Wakefield could suggest they see no significant upside in holding their positions and are seeking an exit to return cash from the sale to themselves or their investors, according to third-party real estate professionals who reviewed the prospectus on Monday.
Cushman & Wakefield did not immediately respond to a media request from CoStar News seeking additional information about the offering. TPG and PAG also did not immediately respond to interview requests.
TPG and PAG helped create the path that led to DTZ and Cushman & Wakefield combining businesses in 2015 to create one of the world's largest commercial brokerages. CBRE and JLL round out what is now the world's top three commercial brokerage firms.
As of last Friday, TPG had 7.5% of Cushman & Wakefield's outstanding shares and PAG had about 4.1% of its outstanding shares, the firm said, in a press release. The two firms waived their rights to nominate a combined three seats on Cushman & Wakefield's board of directors for the company's 2024 annual meeting, the real estate services firm said.
J.P. Morgan is the sole underwriter for the offering. The final terms of the offering will be disclosed in a prospectus supplement filed with the Securities and Exchange Commission. Cushman & Wakefield will not financially benefit from the offering, the brokerage said in a statement.
Cushman & Wakefield has about 52,000 employees in nearly 400 offices in about 60 countries. Last year, the firm reported a combined revenue of $9.5 billion across its core service lines, including services, leasing, capital markets, valuation and other services. The firm manages 6.2 billion square feet of commercial real estate globally.