For this fiscal year, Geeta Gopinath, the IMF’s chief economist, has downgraded the economy by 0.25 percent but attributed the downgrade to India’s economic slowdown. The expected growth in the United States is beyond 4 percent. With the Federal bank increasingly getting ready to loosen the rates, there could be an increased pressure on the entire US economy. The City Momentum Index report predicts a general pattern of rising demand for real estate by customers. If we talk about the top real estate firms, we can only think about quantifiable metrics like market cap and amount of trade. The above also depends on how much goodwill an individual firm has received. In addition, the market cap is proportional to the annual revenue, implying that calculating the capitalization value of any company may be just as good a measure for quantifying the concept of “Top Real Estate Firms” as the overall valuation.
The global outlook for investment in the real estate sector has been positive, with North America emerging as the preferred region. The favorable climate for investment, plateauing interest rates and an environment of technology-driven investment have born well for the real estate market. The favorable global investment climate is useful because the intercompany real estate agreements often play a vital role in enabling us to measure the top real estate firms. Since the fiscal year 2019-20 has not finished, we are discussing the patterns for the fiscal year 2018-19 and using the three completed quarters of 2019-20 as pure forecast reports before making qualified declarations. Consideration of the new and most promising companies is also worthwhile. We look at these firms from the fundraised POV. It is important to remember that seed funding does not in fact preclude a company from entering this list.
Globally, business performance has also been moderately positive. It is not just commercial real estate companies that have done well in the real estate market. Real Estate Investment Trusts or REITs have performed outstandingly well. REITs are vehicles which allow individuals to invest in the portfolio of an immovable business. Those REITs own, create or manage multiple properties generating income. Forbes is launching a Global 2000 that tracks the best-performing REITs of every year. For the 2019-20 fiscal year, the Forbes list featured six American real estate firms with a global footprint. It is important to remember that Forbes listed only those publicly traded corporations whose data is accessible on their global operations. Those rankings were determined on the basis of their profits, benefit, assets and market cap. Increasing of these parameters has been weighted equally, which eliminates any bias that may be creeping up in favor of any particular parameter.
Now is perhaps a good to remember that real estate companies are not only interested in brokering. They often include owning land, managing the assets of investors or developing real estate. Although some businesses own, some also tend to rent out. Owning, maintaining and developing, however, is not only limited to traditional commercial spaces. For starters, American Tower, a renowned real estate company with a market cap of $102.3 billion, trades in communication towers. In identifying the top real estate companies in 2020, this loose definition of real estate is what makes us play around.
This article is meant to make you ask yourself why you are reading this. If you need only traditional brokerage services, you’d probably be getting better services from your local dealer. It is not surprising that the quality of these companies’ services is much superior. This article deals with a mixture of REITs and commercial real estate and investment firms without trying to discriminate for the purpose of loosening the concept of an immovable entity. The companies listed below also include firms which have earned funding.
1. Simon Property Group
Simon Property Group is an American commercial real estate corporation with a 241 million square feet gross leasable area in 325 properties in North America and Asia alone. It is also the biggest retail REIT with a $55 billion market capitalisation. The Simon Property Group is now the largest shopping center developer in the United States, with an annual worldwide sales volume of $5.6 billion and a profit of $2.5 billion. It ranks #3 on the Forbes list.
2. CBRE Group
CBRE Group is the largest commercial real estate firm in the world, with sales of $21.34 billion for the year ended 2018-19. Forbes has ranked it 143 on the list of Fortune 500 firms for the end of the fiscal year. Each year since 2008 it has been on that list. CBRE Group Inc represents over 90 of the top 100 companies listed on Forbes’ Fortune 500 list. It had 90,000 workers fort the fiscal year 2018-19, and had a market capitalization of $21.4 billion. It had a 52-week high of 65 on NYSE and a 52-week low of $45.
3. Cushman and Wakefield PLC
Cushman and Wakefield PLC are among the world’s largest commercial real estate firms, with office buildings running at over 3.6 billion square feet. It had sales of 8.2 billion dollars for the year 2018 and has a work force of 51,000 workers. DTZ and Cushman & Wakefield combined in 2015 and then continued to work under the name Cushman & Wakefield. Despite having such high margins, the market cap is just $4.3bn.
JLL is the world’s second-largest commercial real estate service. It ranks 189th on the list of Fortune 500 companies by Forbes. It also offers land and asset management, facilities management, capital markets, finance and consultancy services in addition to the real estate business. It had $16 billion in sales for the year 2018-19, and a net profit of $491 million. Its liabilities are one reason why it has a market cap of $9.2 billion. It operates in 80 countries as of 2019, and has a workforce number of 91,000.
5. Homie Real Estate
New companies have started using innovative technologies on a more micro-scale to compensate for the issue of residential real estate. Although those companies’ presence is located at their headquarters, they earned impressive valuations in their first and second valuation rounds. Homie, founded in Utah, is one such company that has raised $23 million in Series B funding.
Houwzer is another such company that has earned $9.5 million in private financing. It had a revolutionary business model focused on paying wages to its workers, rather than as a percentage of the overall value of the sale made.
7. American Tower
American Tower Company, or ATC as it’s generally known, is an investment trust in real estate that deals with communication towers. It primarily rents spaces, builds communication towers, and then sells the position to tenants on top of the tower. It had an annual sales volume of $7bn, and a market cap of $85bn. It ranked 410 on Forbes’ Fortune 500 list of companies and 3rd on Forbes’ Global 2000 list of real estate companies.
Short for Real Estate Maximus, RE/Max is a multinational commercial real estate business with 6800 offices and 100000 agents working in more than 100 countries. It had held the #1 market share spot in the US and Canada until 2013. Operating on a franchise model, it had 3000 staff and 13 billion dollars in sales volume by the end of 2018-19. It had a market value of 700 million dollars, with a profit of 265 million.
9. Equity Residential
Equity Residential is North America’s 3rd largest apartment owner, and the 9th largest apartment manager. It had investments in 307 properties, with a total of 79,500 flats in 2018-19 by the end of the third quarter. It had $2.56 billion in earnings, and $27.71 billion in market capitalization by the end of 2018-19. Equity Residential was ranked 18th on the Global 2000 list by Forbes.
10. Vornado Realty
Vornado Realty Trust is a real estate investment trust company which invests primarily in North America’s office buildings and street retail. It had an outstanding success as a REIT with an average trail of 4.2 in PE ratio. It had a $17.6 billion market capitalisation and a $66.17 share price, making it an enticing investment REIT by the end of the second quarter in 2019. It deals mainly within the New York metropolitan region. It announced a dividend of 0.81 dollars for Series A equity shares in the 4th quarter of 2019-20. It had an incredible $2.3 billion profit for a company that worked in a predominantly localized region.
To sum up, real estate firms have gone beyond merely dealing with the acquisition and sale of assets. The assets producing income were commoditized for the market. With optimistic speculations, there is a strong possibility of a rise in the demand in the real estate sector making it highly likely that there will also be an upswing on the commodity market which will bring in additional investments. That has the potential to revive the economy to conditions pre-2008.