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About CB Richard Ellis Real Estate Services, LLC

As a commercial real estate services company, CBRE Group provides leasing, property sales, occupier outsourcing and valuation businesses from about 530 offices worldwide. Subsidiary Trammell Crow provides property development services for corporate and institutional clients, primarily in the US. CBRE Global Investors manages real estate investments for institutional clients. The company garners about 60% of its revenue from the Americas. CBRE was founded in San Francisco in 1906 and by the 1940s grew to be one of the largest commercial real estate services firms in the western US.c 

Operations

CBRE Group operates via three reporting segments: Global Workplace Solutions, Advisory Services, and Real Estate Investments.

Global Workplace Solutions generates about 60% of the company's revenue. Through that segment, CBRE provides a broad suite of integrated, contractually-based outsourcing services globally for occupiers of real estate, including facilities management, project management and transaction services (leasing and sales).

The company's Advisory Services operations include property leasing, capital markets (property sales and mortgage origination, sales and servicing), property management, project management services and valuation services. It addresses property types including office, industrial, retail, environmental and hotels. The segment accounts for about 40% of the company's revenue.

CBRE's Real Estate Investments arm provides investment management services globally and development services in the US and UK. It produces less than 5% of the company's revenue.

Geographic Reach

Los Angeles-based CBRE Group generates about 60% of its revenue from the US, while the UK market represents more than 10%. The real estate services firm is active in greater than 100 other countries. The company more than 530 sales offices and five corporate offices.

Sales and Marketing

CBRE's clients are more than 90 Fortune 100 companies.

The company business is focused on providing services to real estate occupiers and investors. For occupiers, they provide facilities management, project management, transaction (both property sales and leasing) and consulting services, among others. For investors, they provide capital markets (property sales, mortgage origination, sales and servicing), leasing, investment management, property management, and valuation and development services, among others. They provide services under the following brand names: "CBRE" (real estate advisory and outsourcing services); "CBRE Global Investors" (investment management); "Trammell Crow Company" (U.S. development); "Telford Homes" (U.K. development) and "Hana" (flexible-space solutions).

The costs of business promotion and advertising are expensed as incurred. Business promotion and advertising costs of $76.1 million, $74.8 million and $63.1 million were included in operating, administrative and other expenses for the years ended December 31, 2019, 2018 and 2017, respectively.

Investors and others should note that they routinely announce financial and other material information using they investor relations website, SEC filings, press releases, public conference calls and webcasts. They use these channels of distribution to communicate with their investors and members of the public about their company, their services and other items of interest. Information contained on their website is not part of this Annual Report or their other filings with the SEC.

Financial Performance

CBRE's revenue and net income has steadily growing for the past five years (2015 to 2019).

The company's revenue rose more than 10% to $23.9 billion in 2019, driven by increases in all the operating segments.

CBRE's net income increased over 20% to $1.3 billion that year on the higher revenue aided by a lower income tax provision.

The company's cash holdings increased by $229.8 million to $1.1 billion. Operations provided $1.2 billion. CBRE used $721.0 million on investments (primarily business acquisitions and capital expenditures) and $271.9 million on financing activities (mainly repayments on revolving credit facility).

Strategy

During 2019, they completed eight in-fill acquisitions: a leading advanced analytics software company based in the United Kingdom, a commercial and residential real estate appraisal firm headquartered in Florida, our former affiliate in Omaha, a project management firm in Australia, a valuation and consulting business in Switzerland, a leading project management firm in Israel, a full-service real estate firm in San Antonio with a focus on retail, office, medical office and land, and a debt-focused real estate investment management business in the United Kingdom. They acquired Telford to expand our real estate development business outside of the U.S. (Telford Acquisition).

The company continue to monitor developments related to the United Kingdom's withdrawal from the European Union and the uncertainty of the long-term economic and trade relationship between the United Kingdom and European Union. The continued uncertainty has the potential to impact their businesses in the United Kingdom and the rest of Europe, particularly sales and leasing activity in the United Kingdom. In addition, any associated currency volatility could impact their results of operations. They are also monitoring the impact of a coronavirus that emerged in Wuhan, China in December 2019 on business conditions and operations in China and other regions in which we operate.

As CBRE continue to increase their international operations through either acquisitions or organic growth, fluctuations in the value of the U.S. dollar relative to the other currencies in which we may generate earnings could adversely affect their business, financial condition and operating results. Their Real Estate Investments business has a significant amount of euro-denominated assets under management, or AUM, as well as associated revenue and earnings in Europe.

Mergers and Acquisitions

During 2019, the company completed eight in-fill acquisitions: a leading advanced analytics software company based in the United Kingdom, a commercial and residential real estate appraisal firm headquartered in Florida, their former affiliate in Omaha, a project management firm in Australia, a valuation and consulting business in Switzerland, a leading project management firm in Israel, a full-service real estate firm in San Antonio with a focus on retail, office, medical office and land, and a debt-focused real estate investment management business in the United Kingdom.

In late-2019, CBRE completes acquisition of Telford Homes Plc. In mid-2019, the company acquires Omaha Affiliate. In early-2019, are the acquisitions of Florida Valuation and Romonet, Leading Global Data Center Technology Company.

 

Company Background

CBRE in 2011 made one of its largest deals in several years. The company bolstered its global real estate investment management business with the acquisition of ING Groep's real estate investment management operations for some $940 million. The Dutch firm's real estate investment management business in Asia and Europe was merged into CBRE Global Investors and more than doubled the size of the unit. The transaction also included US-based Clarion Real Estate Securities and interests in commercial real estate co-investments. (The ING deal helped boost CBRE's investment management revenue by more than 60% in 2012.)

CB Richard Ellis Real Estate Services, LLC

200 Park Ave FL 19
New York, NY 10166-1899
Phone: 1 (212) 984-8000

Firm Stats

Employer Type: Privately Owned
Vice President: Stephen Eynon
Senior Vice President: Ben Friedland
Manager Of Communications: Kurt Lindsey
Employees (This Location): 400
Employees (All Locations): 6,000

Major Office Locations

New York, NY

Other Locations

Phoenix, AZ
Los Angeles, CA
Walnut Creek, CA
Hartford, CT
Wilmington, DE
Orlando, FL
Louisville, KY
Boston, MA
Portland, ME
East Lansing, MI
Manchester, NH
Buffalo, NY
Long Island City, NY
New York, NY
Woodbury, NY
Charleston, SC
Columbia, SC
Norfolk, VA
Seattle, WA
Bengaluru, India
Chennai, India
Hyderabad, India
Mumbai, India
New Delhi, India