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Property manager to buy rival

By purchasing Trammell Crow, C B Richard Ellis breaks into developing and expands its commercial portfolio.

By JAMES THORNER
Published November 1, 2006

Three of the four tallest skyscrapers on the Tampa skyline are managed by CB Richard Ellis Inc. and the Trammell Crow Co.

CB Richard Ellis also leases Channelside, the city's waterfront entertainment district. Trammell built the Tampa Marriott Waterside hotel and Port Ybor industrial park.

The two companies whose courses have so closely tracked one another are joining forces: CB Richard Ellis announced Tuesday a deal to buy its former rival for about $1.79-billion. Locally, the union of the companies will create the Tampa Bay area's top property management entity.

The 10-million square feet under CB Richard Ellis-Trammell Crow management would include Bank of America Plaza, SunTrust Financial Centre and Fifth Third Center.

CB Richard Ellis' purchase also launches the company into the brick-and-mortar side of the business. Trammell is among the region's top 10 commercial property developers.

"It's a very pleasant surprise. Trammell Crow is a great company, very well respected," said Raymond Sandelli, local managing director with CB Richard Ellis. "Having a development arm is not something we've had in the past."

If the deal is approved by Trammell stockholders by year's end, the new $4.4-billion company would dominate about 10 percent of the commercial real estate market in the United States.

With nearly 50 U.S. offices, Trammell employs about 6,200 and posted 2005 earnings of $59.4-million on $896-million in sales.

CB Richard Ellis, based in El Segundo, Calif., employs about 14,500 workers and posted 2005 net income of $217.3-million on sales of $2.91-billion.

Each employs about 100 in the Tampa Bay area.

Shares of Dallas-based Trammell jumped $9.65, or 25 percent, to $48.75 on the New York Stock Exchange while shares of CB Richard Ellis rose 6.4 percent, to $30.03.

The deal had been rumored for more than a year, but other industry leaders, including Cushman & Wakefield, had also explored a bid for Trammell, Sandelli said.

It would be CB Richard Ellis' biggest deal, surpassing the $415-million purchase of Insignia/ESG in 2003. Trammell jumped into Florida with 1998's purchase of Faison & Associates, which quadrupled its management portfolio in Tampa.

Once the transaction is complete, the combined company will have 21,000 employees and provide services to more than 85 percent of the Fortune 100 corporations.

CB Richard Ellis will absorb Trammell's property management arm but will run the development business as an independent unit under the Trammell Crow brand.

With or without its new partner, CB Richard Ellis is the Tampa Bay area's leading commercial real estate broker.

Information from Times wires was included in this report. James Thorner can be reached at thorner@sptimes.com or 813 226-3313.

[Last modified November 1, 2006, 00:09:53]