Real estate investment bank Eastdil Secured is cutting 7% of its global workforce as higher interest rates and economic uncertainty have seized up market activity and curtailed investment deals.
Eastdil, with a total employee count of more than 500, is trimming back its workforce as the “natural response to the economic downturn and well-documented slowdown in transaction volume,” a person familiar with the situation told CoStar News in an interview. The person added that the New York-based firm has expanded its global headcount by 40% since the end of 2019.
The cuts aren’t specific to one business unit and are relatively spread across the firm globally on both transactional and operational sides, the person said, adding that Eastdil doesn’t plan to make additional cuts at this time.
Eastdil declined to comment on the layoffs, first reported by The Real Deal.
The firm has offices in U.S. markets including Atlanta; Boston; Charlotte, North Carolina; Chicago; Dallas; and Los Angeles. Overseas, it has offices in Dubai, Dublin, Frankfurt, London, Milan, Paris, Hong Kong and Tokyo.
Eastdil’s move comes as worries about a global economic slowdown have seized up investment and other activity and hurt the results of some major commercial real estate landlords such as Vornado Realty Trust.
Commercial real estate lending activity in the fourth quarter saw a sharp pullback with 54% fewer originations in the final quarter from the third quarter, data from the Mortgage Bankers Association shows.
“The financing market remains highly constrained” because of the Federal Reserve’s move to raise interest rates, Michael Franco, president and chief financial officer of New York-based Vornado, said on the company’s fourth-quarter earnings call Tuesday. The commercial mortgage-backed security “market remains largely closed. The market won’t thaw until the Fed ends its tightening cycle.”
Eastdil joins other firms, including Goldman Sachs, Morgan Stanley and Credit Suisse on the investment banking front, and, on the real estate front, brokerages CBRE and JLL, that are said to have announced job cuts in recent months.