Investment Firms Cash In On Washington, D.C.'s Rising Real Estate Market

A merger set to close this month between Washington, D.C.-based real estate firm Cassidy Turley and private equity firm TPG shows the heated pace of investment in the region’s properties.

The $600 million merger seeks to capitalize on rising prices of commercial real estate in Washington and elsewhere during the rebound from the last recession.

Washington was listed by Real Capital Analytics Inc. recently as the nation’s fourth hottest market for commercial real estate sales, following New York City, Los Angeles and San Francisco.

In 2013, there were $6.64 billion in commercial real estate transactions in the Washington area, Real Capital Analytics reported.

Real estate firms earn money from commissions on sales of property and opportunities to attract more investors. Other income comes from property management and appraisals.

Meanwhile, some real estate developers are concerned their industry’s consolidations are concentrating too much decision-making in the hands of too few corporate executives.

But with real estate prices rising, the trend toward mergers and acquisitions among the firms is unlikely to slow soon, according to financial analysts.

Real estate industry giant CBRE reported earnings of $7.18 billion last year. Its rival, JLL, reported $4.46 billion in revenue last year.

Cassidy Turley’s recent business successes have included arranging the sale of the 2000 K St. NW property earlier this year.

Other investment firms are planning to expand their real estate operations in Washington soon. Among them is Italian financial firm Exor sPA, which owns real estate firm Cushman & Wakefield Inc.

Investment house DTZ published a research report in October that said corporate capital targeted at property acquisitions increased 15 percent in the first half of 2014 to $408 billion.