NEW YORK CITY-Tishman Construction Corp., which counts both the original and redeveloped World Trade Center among its credits, has been sold to Los Angeles-based AECOM Technology Corp. The $245-million purchase will be paid for in cash and AECOM common stock.
Dan Tishman, chairman and CEO of the 112-year-old construction management firm, will continue to lead Tishman’s operations while joining AECOM’s management team as a vice chairman and member of its board of directors. He says in a release that the sale represents “the logical next step in the continued growth and success of Tishman, allowing us to expand our reach globally and seize new opportunities as part of the worldwide AECOM team.”
For its part, AECOM—which has offices locally at 608 Third Ave.—says the deal will allow it to expand its mix of higher-margin construction management/ program management business without materially increasing its risk profile. “The addition of Tishman to the AECOM enterprise reflects our commitment to execute on our stated strategy of growth and diversification,” says John M. Dionisio, AECOM president and CEO, in the release.
Both Tishman and AECOM are involved with high-profile projects locally. AECOM is managing the long-awaited and frequently-postponed Second Avenue Subway project, while Tishman is working on 1 World Trade Center for the Port Authority of New York and New Jersey and 4 World Trade for Silverstein Properties Inc. Earlier, Tishman had built the new 7 World Trade for SPI. Additionally, Tishman and AECOM are joint venture partners on phase one of the Department of Homeland Security’s new Washington, DC headquarters.
Although Tishman generated revenues of nearly $1 billion last year, the deal comes at a time when the construction industry is relying increasingly on government infrastructure work to keep going. The American Institute of Architects' semi-annual Consensus Construction Forecast, released Wednesday, projects a 20.3% decline in nonresidential construction spending this year and a marginal 3.1% improvement in 2011. Sectors that will see especially steep drops for 2010 include hotel, office and retail, with declines of 43.3%, 29.1% and 25.6%, respectively.
Not included in the AECOM/Tishman transaction is Tishman Hotel & Realty, an owner/developer with a portfolio of more than 7,000 rooms across the US and which maintains a strategic relationship with Tishman Construction. The two firms have no business connection to Tishman Speyer Properties, although all grew out of the Tishman family.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
