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CBRE Group to Acquire Majority Stake in Caledon Capital


CBRE Group, Inc. CBG inked a definitive agreement to acquire a majority interest in Caledon Capital Management Inc, a Toronto-based infrastructure and private equity solutions provider. The acquisition of the 30-people-strong company, which manages assets of the institutional investors worth around $7 billion, is likely to be closed in late 2017.

Investors are increasingly eyeing at alternative investments such as real estate. Acquisition of Caledon is an excellent addition to the existing array of real estate and investment solutions offered by CBRE Global Investors. This is likely to complement the CBRE Global Investors’ service offerings.

Caledon combines direct investments, co-investments, secondary investments, and primary fund investments to meet the unique investment requirements of the clients. Upon the completion of the acquisition, Caledon will be known as BRE Caledon Capital Management Inc. This acquired entity will function as a separate entity under CBRE Global Investors. For Caledon, this association with CBRE Group will open up increased investment opportunities throughout the world and aid in offering better returns to its clients.

Shares of CBRE Group have underperformed the Zacks categorized Real Estate – Operations industry in the last three months. Shares of the company have lost 2.9%, while the industry edged down 0.4%. In the last 30 days, its second-quarter and full-year 2017 earnings per share estimates remained unchanged.

Currently, CBRE Group carries a Zacks Rank #3 (Hold).

Investors interested in the REIT space, may consider better-ranked stocks like DCT Industrial Trust Inc. DCT, Gaming and Leisure Properties, Inc. GLPI and PS Business Parks, Inc. PSB, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the last 30 days, DCT Industrial Trust’s funds from operations (FFO) per share for second-quarter 2017 remained unchanged at 59 cents.

In the last 30 days, Gaming and Leisure Properties’ FFO per share for second-quarter 2017 remained unchanged at 77 cents.

In the last 30 days, PS Business Parkss FFO per share for second-quarter 2017 moved up 2% to $1.53.

Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income. All EPS numbers presented in this write up represent FFO per share.

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