Wells Fargo to Sell Eastdil Secured in Management Buyout Deal

Real Estate In-Depth | June 2019

NEW YORK—Wells Fargo & Co. announced on June 11 it had reached an agreement to sell Eastdil Secured, its private real estate investment banking division, in a management buyout transaction.

The sales agreement follows Eastdil’s management-led recapitalization, in partnership with Guggenheim Investments, on behalf of certain institutional clients, and Temasek, a global investment company headquartered in Singapore. Subsequent to the sale, Wells Fargo will retain the public market real estate investment bankers of Eastdil, who will form the real estate, gaming, lodging, and leisure (REGAL) industry coverage group within Corporate & Investment Banking (CIB). Additionally, Wells Fargo will retain a minority ownership interest in Eastdil.

Terms of the transaction were not disclosed. The transaction is expected to close in the fourth quarter of 2019. Wells Fargo Securities served as the financial advisor to Wells Fargo with Sullivan & Cromwell LLP serving as legal counsel.

“This newly dedicated Real Estate, Gaming, Lodging, and Leisure investment banking coverage group will leverage partnerships across the bank, with a deep pool of talent and expertise, to serve clients in these key industries and their complex financial needs,” said Rob Engel, co-head of Wells Fargo Corporate & Investment Banking.

The REGAL team will provide a full suite of investment banking and capital markets capabilities including mergers and acquisition advisory solutions, as well as debt and equity origination and structuring. The group will also continue its long-standing partnership with Wells Fargo’s Commercial Real Estate (CRE) group, the top commercial real estate lender in the country with a commercial real estate portfolio totaling approximately $143.5 billion.

The CRE group delivers a comprehensive platform of banking, financing and servicing solutions for commercial real estate companies inclusive of: balance sheet lending; CMBS origination, distribution and loan servicing; agency financing for multifamily assets; financing for real estate investment trusts (REITS); and debt and equity capital for the affordable housing industry.

“The breadth and depth of Wells Fargo’s Commercial Real Estate platform is unmatched in the industry, and our CRE team looks forward to partnering closely with the new REGAL investment banking coverage group to continue delivering a comprehensive and seamless suite of financing solutions and advice to commercial real estate clients,” said Mark Myers, head of Wells Fargo Commercial Real Estate.

When the deal is finalized, Eastdil Secured will maintain its name and continue to be led by Benjamin V. Lambert as chairman, Roy Hilton March as CEO, D. Michael Van Konynenburg as president, as well as its current Management Committee.

Eastdil Secured holds the top market share for 2018 and year to date 2019 for real estate deals greater than $100 million across all property types in the United States. In 2018, Eastdil Secured advised on 827 transactions for $243.5 billion.

The firm’s newly established partnership with Guggenheim Investments and Temasek, will position Eastdil Secured to further enhance its role in the U.S. commercial real estate capital markets, while also strengthening its growing presence in both Europe and Asia.

“We are excited to embark on this next chapter of Eastdil Secured’s evolution,” said Lambert. “With our new long-term partners, we will continue to be the leader in our industry by providing our clients with a unique combination of real estate and capital markets expertise.”

Hilton March added, “Guggenheim Investments, on behalf of certain institutional clients, and Temasek represent ideal partners for Eastdil Secured as we embark on this next stage of growth. The eagerness of our professionals to acquire a meaningful stake in the future of Eastdil Secured, alongside these preeminent investors, underscores our shared confidence in our firm’s people and future. Most importantly, through this transaction, we will be better able to serve our clients with investments in enhanced technology, a broader footprint and deeper global relationships.”

The firm will continue to have its U.S. headquarters in New York City and Los Angeles and its Europe headquarters in London, with additional domestic offices in Atlanta, Boston, Chicago, Dallas, Orange County, San Francisco, Seattle, Silicon Valley and Washington D.C., and additional international offices in Dubai, Frankfurt, Hong Kong and Tokyo.