LaSalle talking about big mergers and acquisitions

June 17 may go down as one of the wildest days of the year in commercial real estate. On that day, Chicago-based LaSalle Partners Inc. made public two big secrets it had been trying to keep.

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In the first announcement, LaSalle confirmed that it is in discussions to merge with London-based Jones Lang Wootton in a transaction in which JLW shareholders would receive LaSalle shares.

In the second announcement, LaSalle confirmed that it also is talking with Australia-based Lend Lease Corp. about acquiring its Atlanta-based Compass Management and Leasing Inc. as well as Lend Lease's U.S. retail property management business.

Although all sides involved stressed that the talks are in the early stages, the companies already are saying that if LaSalle does acquire Compass, it "would be integrated into the merged Jones Lang Wootton and LaSalle Partners management services business, if the LaSalle Partners and Jones Lang Wootton transaction is completed."

Still, the normally talkative corporate communications types at the companies said they could say absolutely nothing about the possible merger and acquisition. Straight down the line LaSalle's Magnes Welsh, JLW's Mary Quinn and Lend Lease Corp./ERE Yarmouth's Jonathan Miller said they could offer nothing.

The involved parties decided to confirm they were in talks "in response to inquiries," according to a LaSalle press release. Also, rumors about the transactions had caused fluctuations in the stock prices of LaSalle and Lend Lease.

Meanwhile, on June 18, the CEO of Chastain Capital Corp., a hybrid REIT managed by Lend Lease's ERE Yarmouth, issued a release of his own to say that Lend Lease's "discussions regarding the sale of its property and facilities management business to LaSalle Partners Inc. is expected to have no material impact on" Chastain Capital.

So what happens if the two transactions do occur? LaSalle Partners becomes more of a major player in global real estate than it already is. The company, which touts itself as "The Real Estate Services Firm of the Future," has a staff of more than 1,400 and operates 10 corporate offices and 300 property offices in the United States. LaSalle Partners, which had total revenues of nearly $225 million in 1997, also operates eight international offices. Its LaSalle Partners Management Services Inc. subsidiary leases and manages 200 million sq. ft. of office, industrial and retail space in 100 U.S. markets.

Jones Lang Wootton, a global real estate provider, has 84 offices in 33 countries and a staff of more than 4,000. A privately held business, JLW was established in 1783.

Compass operates in more than 250 cities in the United States, United Kingdom, South America, Australia and Asia and has about 195 million sq. ft. under management from institutional owners and corporations. Lend Lease's U.S. retail property management operation has about 30 million sq. ft. of space under management.


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