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Open Season on Appraisal Firms as JLL Snaps Up Three More Integra Realty Offices

UPDATED: Acquisition Spree Intended to Strengthen Valuation, Advisory Services Offerings in Midwest
December 21, 2016
After snapping up the Dallas and Houston affiliates of Integra Realty Resources (IRR) in short order, Jones Lang LaSalle (NYSE: JLL) has pounced again, adding a third IRR affiliate covering the Chicago, Kansas City and St. Louis offices of the independent commercial real estate valuation, counseling and advisory network in less than three months.

The acquisition of IRR's three-office Chicago affiliate follows acquisitions in October and December of IRR affiliates in Houston and Dallas, respectively. JLL announced plans bolster its appraisal, valuation and advisory services in the U.S. in late September.

JLL's plan to add a robust valuation and advisory services business line as a needed service to match its competitors is being directed by Michael Welch, a strategic hire who joined the firm this past October. Welch is quite familiar with Integra as he served as IRR's chairman and CEO before joining JLL.

JLL’s acquisition of the Chicago IRR affiliate is the latest but not likely to be the last domino to fall in the national valuation and advisory sector. Insiders widely expect other IRR affiliates to be acquired by larger companies in coming weeks or months.

At present, JLL and Newmark Grubb Knight Frank are said to be the most active among the large CRE brokerage firms in negotiating acquisitions and recruiting talent from competing appraisal and valuation firms. Mid-tier national firms like BBG, Inc., which in September announced the acquisition of Denver-based Commercial Valuation Consultants, Inc. (CVC), are also in active talks with other real estate valuation companies.

"I've never seen such a high level of activity in this business in my career," said Chris Roach, chief executive officer for Dallas-based BBG. "Typically we start with a geographical need, but our ideal target would have much more value than a dot on the map. We expect to hopefully announce a few of our own deals in the first quarter."

Technology and national resources are said to be factors in driving the recent M&A activity swirling through the appraisal and valuation sector as firms work to deliver more consistent and high-quality products for both their appaisers and clients, Roach said.

"JLL is a highly respected brand and I'm excited to see another global corporation recognize the value in our industry, and come into this space by growing through acquisition and taking down offices in key markets," Roach said. "I respect the fact they're being aggressive about being in this space."

IRR's Chicago affiliate is led by Eric Enloe and Brandon Nunnink joined by Kenneth Jaggers in Kansas City and Ryan McDonald in St. Louis. Combined, the offices have about 50 employees and complete about 2,500 assignments for more than 400 local, regional and national clients annually.

Enloe will lead JLL’s valuation practice in Chicago and continue servicing national client relationships while Nunnink will manage the Midwest practice.

As head of JLL's Valuation and Advisory Services in the U.S., Welch told CoStar in October that JLL hoped to announce "additional partners," by the end of the year.

"We’re not going to be as concerned with the number of dots we can put on a map, but rather making sure they’re in markets where our clients have needs," Welch said in October. "We’re going to hire the best people we can in markets where it makes sense. We’ll also make acquisitions to plant flags on the East Coast and West Coast and in the top financial markets."

John Gates, CEO of markets for JLL in the Americas, also hinted that more transactions may be in the offing.

"We look forward to continuing to add exceptional valuation offices and personnel throughout the country," Gates said in a release announcing its latest IRR affiliate acquisition on Monday.
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