by Mike Sharkey
Staff Writer
CB Richard Ellis, the world’s largest commercial real estate services firm in terms of 2005 revenue, has entered into an agreement to acquire Trammell Crow Company. The transaction is valued at approximately $2.2 billion and Ellis will assume Trammell Crow’s corporate debt as well as all transaction and integration costs.
“They are a good company and we are a good company and we are both coming together to make it synergistic,” said local CB Richard Ellis Managing Director Jim Citrano. “You will not see a noticeable change. The right people will execute the right deal and nobody loses their jobs.”
Citrano said the deal will close either late this year or in early January. The deal must still be approved by Trammell Crow’s shareholders and federal regulatory agencies including the Securities and Exchange Commission. Once finalized, CB Richard Ellis — a Fortune 1000 company based in Los Angeles — will have approximately $4.4 billion in pro-forma 2006 revenues and 21,000 employees worldwide.
Trammell Crow Company delivers brokerage, project management, building management and development and investment to two groups: users of commercial real estate and facilities and investors in commercial real estate. The company has dozens of offices all over the world.
CB Richard Ellis is a similar company, but Citrano said there are enough differences to justify the merger and create a bigger, better company.
“There are a certain amount of economies of scale,” he said. “It’s a good fit. Culturally, we’re the same. It’s really two corporations that are becoming one entity. They are into more facilities and asset management and we do brokering. They are a good group of people and their assets fit our abilities.”
Citrano said the deal was likely in the works for several years and he isn’t sure exactly how the deal will affect each company’s personnel.
“Some will be enthusiastic while some will want to go somewhere else,” he said.
Trammell Crow Company provides the full cycle of commercial real estate services in the US and is a leading provider of the company’s four core services; brokerage, project management, building management, and development and investment. Today, the company has a broad North American footprint, with 45 full-service offices including one here in Jacksonville in the Wachovia tower.
Upon completion of the transaction, Trammell Crow Company’s development and investment business will be run as a wholly-owned, but independently-operated, subsidiary and will retain the Trammell Crow Company brand name. Robert Sulentic, the chairman and CEO of Trammell Crow Company, will join CB Richard Ellis as group president. He’ll be responsible for the development and investment business as well as the Company’s Europe, Middle East, Africa and Asia-Pacific operations.
“We are excited about having the Trammell Crow Company team join with ours and its service offerings becoming a valuable part of our platform,” said Cal Frese, CB Richard Ellis’ president of the Americas region, in a press release about the merger. “Importantly, both companies have very similar and proud heritages that are embedded in their corporate cultures and which highly value integrity, work ethic and customer service excellence.”