Real Estate Forum - November 2008

CB Ric hard Ellis Group Inc. Brett White, President & CEO

Revenues Fiscal Year 2007: $6 Billion Areas of Specialization: Brokerage, Finance Numbe r of Offices: 400 Number of Employees: 29,000 THE FIRST NINE MONTHS O3F LAST YEAR WAS A BOOM TIME for CB Richard Ellis, which saw its revenues increase by 49.7% between year-end 2006 and 2007. That record $6-billion figure made the Los Angeles-based company on an earnings basis the world’s largest commercial real estate services firm, advising owners, investors and space users around the globe. Earnings per diluted share also rose 23% over the year to $1.66, a new high for the firm. In the business for more than 100 years, the Fortune 500 and S&P 500 company completed 67,600 transactions totaling $264.2 billion last year, which breaks down to $84.1 billion in 45,250 leases and $180.1 billion in 12,350 property sales. On the financing end, the firm arranged 1,373 in transactions, accounting for $25 billion in capital. Transactions completed in the US represented nearly $3.7 billion of CBRE’s 2007 revenues; the Europe, Middle East and Africa regions contributed more than $1.3 billion; and some $548.7 million came from the Asia Pacific. Though transaction velocity has certainly declined this year, the firm has been able to increase its market share for both leasing and investment sales brokerage in many countries. Over the long term, CBRE leadership continues to see the potential for growth in Europe and Asia Pacific. “In countries like China and India, we are expanding our presence and taking advantage of opportunities in real time,” says White. CBRE is also looking to expand its service lines, particularly overseeing the real estate operations of corporate and institutional clients. The Trammell Crow purchase accelerated that process and, in fact, outsourcing is now the company’s largest business line, says the CEO. “So far this year, we’ve added 27 new corporate customers and expanded our contractual work for 25 existing accounts,” he relates. “Many of these relationships involve providing services on an international scale,” he adds. CBRE’s commercial properties and corporate facilities under management have also grown by more than 195 million sf globally this year. “We are both managing more property and doing more for our clients in areas like sustainable practices.” Sustainability is indeed a major agenda item for the firm. “We made a strategic decision last year that we did not want to be a company that just talked about sustainability. We made a commitment to be held accountable for a real target—carbon neutrality by 2010,” White explains. It has taken considerable steps to reach that goal, including the creation of an international task force to share best practices and educational programs for clients and employees, as well as the implementation of internal policies and business practices that promote sustainability. “As important, we are assisting clients with energy efficiency and sustainability programs at much of the more than two billion sf of space we manage around the world.”