Full Year Highlights
• Commission and service fee revenue increased 15.9% to a record $2.1 billion;
• Commission and service fee revenue increased by double-digits in all three regions:
15.2% in the Americas, 14.9% in Europe, Middle East and Africa and 25.0% in Asia Pacific;
• Commission and service fee revenue increased across Corporate Occupier & Investor Services, Capital Markets, Leasing and Global Consulting;
• The value of Leasing transaction volumes increased 15.6% to a record $63.9 billion;
• Adjusted EBITDA increased 21.0% to a record $175.4 million;
• Adjusted net income increased 33.3% to a record $61.6 million;
• Acquired Massey Knakal Realty Services, New York’s No. 1 Investment Sales firm for 13 consecutive years based on the number of transactions.
Edward C. Forst, Cushman & Wakefield’s President & Chief Executive Officer, said: “Demand from investors and occupiers continued to drive global real estate markets in 2014, increasing activity across our platform to record breaking levels. The ‘Client Only’ focus of C&W’s professionals resulted in advising world class clients, including salesforce.com, Millennium Partners and Ericsson, on significant transactions that are Transforming the Way the World Works, Shops and Lives™.
“Our collaboration across geographies and services resulted in record revenue and profitability, which solidifies our position as a top tier global real estate services firm. This performance was driven by a 42% increase in Corporate Occupier & Investor Services commission and service fee revenue, record Leasing transaction volumes and completed appraisals with a value exceeding $1 trillion for the third year in a row.
“In addition to our record financial performance, the strategically targeted acquisition of Massey Knakal, strengthening our team with key leadership appointments, a new Global Management Committee and the robust economic landscape have emboldened us to further accelerate our ambitious strategic plan.”
On February 3, 2015, the Board of Directors of C&W Group, Inc. designated a Strategic Review Committee, chaired by Mr. Forst, to oversee a review of potential strategic alternatives for the Company. The Company retained Goldman, Sachs & Co. and Morgan Stanley & Co. LLC as its financial advisors to assist with the strategic review process. There can be no assurance that the review of potential strategic alternatives will result in any transaction.
Record commission and service fee revenue increased between approximately 15% and 25% across all three regions in 2014.
The company’s strong revenue growth in 2014 was led by Corporate Occupier & Investor Services (“CIS”) with a 42.1% increase in commission and service fee revenue. Property under management globally as of December 31, 2014 increased 7.0% compared with year-end 2013 to 1.1 billion square feet. CIS also expanded several client relationships including Ericsson, which awarded C&W comprehensive services related to one of Silicon Valley’s largest office leasing transactions in 2014 for a new campus of over 400,000 square feet. In addition, IndCor appointed C&W as property manager for an additional 6.9 million square feet of industrial assets.
Leasing commission and service fee revenue in 2014 was driven by a record value of transaction volumes, which increased 15.6% to $63.9 billion. Working seamlessly across geographies and services, C&W advised world class clients on several significant leasing transactions. The Company represented salesforce.com for a new headquarters, the largest office lease in San Francisco history, as well as for an expanded lease in London, and both properties are now named Salesforce Tower. C&W also advised Brookfield Property at Principal Place on London’s largest 2014 office leasing transaction. In addition, the Company represented Millennium Partners’ development at Downtown Crossing in the most significant retail project in Boston in recent history featuring Primark, a leading European fashion retailer. C&W is also well-positioned to capture future opportunities, as evidenced by its appointment as joint marketing and leasing agent for Swire Properties and HKR International of two office towers totaling 1.9 million square feet for their new Dazhongli development in Shanghai.
Cushman & Wakefield’s acquisition of Massey Knakal on December 31, 2014 significantly enhances the Company’s Capital Markets presence. Being the #1 Investment Sales Firm based on number of transactions in the New York metro area transforms C&W both locally and around the world. Capital Markets continued its positive momentum with 2014 commission and service fee revenue growth of 16.2% as the improved credit environment and continued lower interest rates boosted capital flows across investor classes. High-profile assignments included advising salesforce.com in the largest Occupier transaction in San Francisco history for the purchase of 50 Fremont Street from TIAA-CREF. C&W also advised Blackstone on the acquisition of a pan-European logistics portfolio in Europe from SEB Asset Management for €275 million. In addition, the Company arranged Canada's largest hotel investment sale in 2014 of the iconic Fairmont Empress in Victoria, as well as advised the State Oil Fund of the Republic of Azerbaijan (SOFAZ) on the largest investment transaction in Seoul, South Korea in 2014.
Valuation & Advisory (“V&A”) completed appraisals on behalf of the world’s largest real estate investors and lenders during 2014 with a record global value exceeding $1.2 trillion, a 6.4% increase compared with the prior year. Of particular note, C&W advised Chinese insurance company Anbang Asset Management (Hong Kong) Co. Limited by conducting valuation services on its purchase of the Waldorf Astoria Hotel & Towers from Blackstone for $1.95 billion, the largest hotel sale in U.S. history. In addition, the Company was engaged as an independent appraiser of Saks Fifth Avenue’s flagship store in Manhattan to value the landmark building and land for a ground mortgage.