Tenant-focused real estate services firm Savills has bought two companies tied to helping North American corporate clients move offices, deals that come as traditional brokerages diversify beyond transaction-dependent businesses.
Savills acquired Hoffman, a move management consultancy started in New York, as well Compustall Services, a manager of “seamless IT transitions” during workplace relocations, London-based Savills said Monday in a statement.
Savills has also started a business line called Savills Relocation Management, a company spokesperson told CoStar News, while declining to specify terms of the purchases.
Real estate services firms including industry giant CBRE have been diversifying their businesses beyond brokering leases and sales over the years to try to become one-stop shops of sorts, especially as the pandemic upended the office market. CBRE last month raised its profit outlook as its businesses including facilities and property management, loan servicing and valuations posted 17% revenue growth in the second quarter, topping a 15% increase for areas including leasing and property sales.
Savills CEO Mark Ridley said this year the company's “improved performance in 2024 reflects the robust earnings provided by [its] less transactional businesses together with the effect of [its] inherent operating leverage in the early recovery of transactional markets.”
Savills’ Consultancy and Property and Facilities Management last year posted revenue increases of 8% and 5%, respectively. The gains would have been 9% and 7%, respectively, without the impact of currency translations.
In fact, Savills’ businesses not dependent on transactions have seen compounded annual revenue growth of 10.1% on average in the past 10 years, almost double the 5.8% increase of transactional businesses, according to the firms’ 2024 earnings results. What it calls “less transactional” businesses have grown to 64% of the company total in 2024 from 54% in 2014.
In another example, Toronto-based Colliers last week reported that its fast-expanding engineering and design division, which provides such services as architecture, consulting, project management and civil engineering to public agencies and business clients, generated a 67% jump in revenue over the second quarter a year ago. In contrast, total firmwide revenue rose 18%.
To be sure, mergers and acquisitions don’t always work because of issues including cultural fit and failure to integrate for expected synergies, studies have found.
Rise in corporate HQ moves
Savills’ expansion in relocation services comes as the hybrid work pattern has led some companies to relocate their headquarters as they downsize or move to new or renovated properties. Business headquarters relocation “continues to be a significant focus in the dynamic landscape of corporate strategy,” CBRE said in a report this year. 2024 saw a significant increase in corporate headquarters relocations, with a total of 96 moves, “as companies seek new environments that align with their operational goals and workforce needs.”
The two Savills acquisitions mark the firm’s “continued expansion” of its “integrated service platform,” which it said helps clients with “a single, seamless solution for planning and executing complex workplace transitions across sectors and geographies.”
Hoffman was founded in 1987 to help with office moves before eventually becoming a national consultancy working with a broad range of industries and space types, including headquarters, hospitals, labs, trading floors, media studios and academic campuses, Savills said. The firm manages both single-site and portfolio-wide relocations, with projects it oversees totaling about 10 million square feet annually.
Rick Hoffman, founder of Hoffman, has stayed to now serve as president of Savills North America Relocation Management, Savills said. Hoffman said in the statement that he’s worked with Savills for decades.
Savills Relocation Management will work with clients through every stage of occupancy, from move-in to ongoing transitions and end-of-lease decommissioning, Savills said. Clients can access an expanded line of services, including relocation and technology support.