Colliers has agreed to invest in Rockwood Capital, a US real estate investment management firm with more than $12 billion of assets under management.
Headquartered in New York, with offices in Los Angeles and San Francisco, Rockwood specializes in equity and credit investments across multifamily, office, mixed use, life science, hospitality, and retail asset classes across North America.
Colliers will acquire a 65% stake in Rockwood, with the balance of the equity retained by Rockwood’s senior leadership team who will continue to lead the business under the “perpetual partnership” model with Colliers, providing full alignment, long-term stability, and orderly succession over time.
Upon completion, Colliers expects the annual run rate of management fee revenue to be between $70 and $75 million and operating results to be significantly accretive.
“Our partnership with Rockwood will expand our operations in the US and add several new asset classes and strategies, including excellent capabilities in the rapidly growing real estate credit space,” said Zach Michaud, Co-Chief Investment Officer of Colliers.
“We are excited to partner with Rockwood’s strong leadership team who have had a long and distinguished track record of success. We are looking forward to capitalizing on the many synergies with our existing investment management platforms and our global real estate services business. With private real estate benefitting from macro tailwinds, we anticipate a continued increase in investor allocations to high-quality firms like Rockwood. We also expect this partnership to benefit from the combined limited partners across our entire platform due to enhanced product selection, world-class expertise, and top-tier risk-adjusted returns,” he added.
“This is the latest step in our ambitious growth strategy to build a world-class investment management platform within Colliers. The addition of Rockwood demonstrates our continued focus on building scale, expanding on the success of Harrison Street and Colliers Global Investors, executing on the recently announced transaction with Basalt, and capitalizing on the outstanding fundraising momentum we have experienced over the past several years. Rockwood’s values and culture align strongly with ours and we are delighted to welcome this exceptional team of professionals into our organization. Colliers is positioned as one of the world’s leading alternative investment managers with a combined $77 billion in AUM once all announced transactions are completed,” said Jay Hennick, Chairman and Chief Executive Officer of Colliers.
“Colliers is one of the most respected names in real estate globally. Their investment in Rockwood is a recognition of the strength of our franchise, the talent of our professionals, and the positive contributions that we have made to the communities in which we have invested over the past three decades. Colliers shares our commitment to continuously add value for our properties and for our investors. This mission is greatly enhanced by partnering with the talented team at Colliers,” said Tyson Skillings, Rockwood’s Managing Partner.
David Becker, Rockwood’s Managing Partner further commented, “We are particularly attracted to Colliers’ enterprising culture, decentralized operating model, significant inside ownership, and impressive performance over many years. We are confident our new partnership will allow us to leverage Colliers’ global platform to strengthen our capabilities while allowing us to remain an entrepreneurial and nimble steward of our investors’ capital.”
The transaction is subject to customary closing conditions and approvals and is expected to close in the third quarter of 2022. Financial terms of the transaction were not disclosed.
In connection with this transaction, Berkshire Global Advisors acted as financial advisor and Kirkland & Ellis acted as legal advisor to Rockwood. Sidley Austin acted as legal advisor to Colliers.