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Merger of Smaller Rivals Shouldn't Damage This Commercial Real Estate Powerhouse

Jones Lang LaSalle should be able to weather upcoming merger of smaller peers.

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Private-equity-backed commercial real estate firm DTZ, which owns Cassidy Turley, has agreed to buy Cushman & Wakefield in a deal that is expected to close in late 2015. Although we view DTZ’s combination with Cushman as slightly negative to global leaders  CBRE Group (CBG) and  Jones Lang LaSalle (JLL), we don’t think it threatens either company's wide moat rating or fair value estimates.

We think demand for commercial real estate services will continue to accrue to global providers that can serve clients with a complete range of offerings in all of their markets around the world. While we have long viewed CBRE and Jones Lang LaSalle as leaders in this regard, we think Cushman will eventually emerge as a third major force despite integration challenges and possible disruptions from the merger.

Todd Lukasik does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.