Singapore’s Temasek and US-based asset management group Guggenheim Investment are said to be in talks to buy Eastdil Secured, the real-estate brokerage and investment bank owned by Wells Fargo & Co, according to a Wall Street Journal report.
The price of the purchase was not identified, and there is still a chance an agreement will not be reached, the WSJ report said. Wells Fargo acquired Eastdil in 1999 for $150 million, according to M&A data portal Mergr. The real estate brokerage firm was then merged with Secured Capital in 2006.
The management team at Eastdil will continue to own part of the firm’s shares.
The deal, if completed, will mark Temasek’s first direct investment in a US-based real estate brokerage. Meanwhile, Eastdil will be exposed to expansion opportunities in Asia, a market where its major competitors like CBRE and Cushman & Wakefield have set up significant footprint.
Eastdil would also face fewer regulatory restrictions if it is no longer part of a US bank, the report said.
For Wells Fargo, it was said to be a consistent move with the bank’s strategy of divesting from non-core businesses.
Guggenheim, the $200-billion AUM investment firm, would be a financial investor in Eastdil rather than integrating the business into its operations, the WSJ report noted, cited its sources.
As Wells Fargo explored the sale of the real estate investment bank unit, in February, CBRE poached Doug Middleton from Eastdil to become its vice president for the New York City market.
Eastdil had earlier lost its senior team to competitors including Cushman & Wakefield and Newmark.
WSJ said, Eastdil has held a leading position in major markets like New York and Los Angeles, and has dominated larger commercial real estate sales in Manhattan and other major markets for years.
However, the firm has lost some ground to competitors recently, including in the crucial New York City market where Cushman & Wakefield surpassed it to be the number one player in office property sales last year with $6.5 billion, while Eastdil had $3.8 billion, WSJ cited a Real Estate Alert newsletter.