By DANIEL MILLER
CB Richard Ellis Group Inc.’s $2.2 billion acquisition of Trammell Crow Co. in December has shaken up the local brokerage industry, with about three quarters of Trammell Crow’s Southern California brokers leaving the company.
As with any significant deal there is attrition.
But because of specific redundancies between the two companies and the competitive nature of the business, only about 15 or 20 of Trammell Crow’s 60 local brokers have stayed, according to executives familiar with the fallout.
“There were several outstanding senior agents at Trammell Crow who simply weren’t going to be the go-to people at CB Richard Ellis,” said Bill Boyd, executive vice president at competitor Grubb & Ellis Co. and managing director of the firm’s Los Angeles metropolitan region. “There are only so many deals in the marketplace and only so many senior agents that can go after the deals.”
The acquisition of Dallas-based Trammell Crow was first announced a year ago this month and finalized in mid-December.
The acquisition was widely seen as an effort by CB Richard Ellis to become more nimble on the corporate services side of the business, which involves handling issues such as construction, relocation and facilities management.
Los Angeles-based CB Richard Ellis is the biggest real estate services company in the world and is well staffed in virtually all other aspects of commercial real estate.
OC Shifts
The acquisition prompted CB Richard Ellis to shift some workers out of Orange County. Some 200 jobs in one of the company’s Newport Beach offices are being relocated to central and Midwest states, according to company officials.
CB Richard Ellis still has about 440 people in Newport Beach and Anaheim.
That includes roughly 100 brokers and 290 people in the company’s property management group, according to the latest figures provided to the Business Journal.
Lew Horne, executive managing director of CB Richard Ellis’ greater Los Angeles region, declined to discuss the exact number of area Trammell Crow brokers that stayed on with the company but acknowledged there were departures.
“If the brokers were not aligned with a corporate account or an institutional account or didn’t feel they had a place within CB, they were more apt to talk to competitive firms,” Horne said.
The integration of Trammell Crow is complete, he said.
In the aftermath of the acquisition announcement, Trammell Crow brokers,and a few managers,left to take jobs at the local offices of other commercial real estate firms, including Grubb & Ellis Co. and Cushman & Wakefield Inc.
Elizabeth Hurley, formerly a senior vice president with Trammell Crow joined the Orange County office of Cushman & Wakefield as senior director in March.
Hurley signed on with six other brokers from Trammell Crow, who will pepper Cushman & Wakefield’s Southern California offices.
A group of 50 brokers hitting the market over a period of months is no small number. By way of comparison, Cushman & Wakefield has about 150 brokers in seven offices in Southern California.
Several former Trammell Crow brokers did not return calls for comment.
Moves Present Opportunity
Joe Vargas, executive managing director at Cushman & Wakefield and regional manager for Southern California, said that about 15 Trammell Crow brokers have joined his company since the acquisition.
“Any time there is the opportunity to pick up great professionals one should consider (himself) fortunate,” Vargas said. “Brokers don’t switch companies for the fun of it. These were highly successful professionals and when the acquisition was taking place it gave them the opportunity to look at the platform that would best suit their practice and enhance their careers.”
Moving isn’t easy, according to Vargas.
“There are new surroundings and new people and it takes getting comfortable in a new work environment and the policies and the procedures of a new company,and really the fear of the unknown,” he said. “Brokers often ask themselves, ‘What will my client think of this move?'”
Indeed, a group of Trammell Crow professionals did stay on board.
Brad Cox, a managing director at Trammell Crow, said those who fit in really had no reason to go.
“CB Richard Ellis was already a brokerage powerhouse,” Cox said. “They were able to retain the top power in the organization and kept the key top performers (from Trammell Crow) in a lot of the markets.”
And those who stayed say that the global reach and resources of their new firm has expanded their business horizons.
“It enables us to leverage what we do over here,” said former Trammell Crow broker Jeff Lasky, now a senior vice president with CB Richard Ellis who handles project leasing for large Westside office developments. “Within our group many stayed. It has been pretty seamless.”
But Lasky acknowledged that “street brokers” with less experience might have a different perspective on the combination because “all of the sudden they have different competition so they are looking for another opportunity.”
Jason Warner, a former Trammell Crow broker, said he was an executive vice president at Trammell Crow; he now holds a title,senior vice president,that is one rung below that perch.
“It was one of the challenging things,” Warner said. “I wasn’t at their criteria (to be an executive vice president), though I was at Trammell Crow.”
Miller is a staff writer at the Los Angeles Business Journal.
