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t press time, the Federal Trade Commission had granted early approval of the proposed acquisition of Dallas- based Trammell Crow Co. by Los Angeles- based

Paul Waters

CB Richard Ellis Group, Inc., with the deal awaiting Trammell Crow shareholder approval at a Dec. 18 meeting before the planned closing date of Dec. 20.
   Upon completion of the transaction, valued at US$2.2 billion, 100- year- old CBRE will have combined pro- forma 2006 revenues of approximately $4.4 billion and approximately 21,000 employees. CBRE spokesman Robert McGrath says the transaction breakdown is "$1.9 billion in terms of the cash we're paying, and the other $300 million is $100 million of Trammell Crow corporate debt, and $200 million in transaction fees and costs."
   Once the deal is done, CBRE would be the first commercial real estate services company to qualify for the FORTUNE 500 list of the largest U.S. corporations. That would build on the Nov. 15 landmark inclusion of CBRE in the S&P 500 Index, making the firm the first commercial real estate services company to earn that distinction as well.
   "With the acquisition of Insignia in 2003, we achieved preeminence in our transaction business," said Brett White, president and CEO of 100- year- old CB Richard Ellis. "Now the acquisition of Trammell Crow Company creates the best- in- class corporate outsourcing and institutional property management business, and further augments our transaction business. Trammell Crow Company is one of the premier service companies in our industry, with a rich history, dedicated employees and strong management, a stellar client base and core competencies that are highly complementary to our own."
   Asked what he's already hearing from clients about the merger, Paul Waters, senior managing director of CB Richard Ellis' North American Industrial Services, says, "I think our clients realize the value and increased firepower the merger provides. We've been talking to them, letting them know the facts and figures. They appreciate it, and see increased services and increased talent being brought to bear on their requirements. CBRE has a wonderful global corporate services group. Trammell Crow has always been a frontiersman in that segmentation. Clients are seeing combined strengths."
   In a Q&A with analysts, White said synergy savings should amount to "somewhere north of $65 million." He said the Dallas firm's expertise in complex, integrated account management will mesh well with CBRE's historical focus on local market transactions. And he remarked how well the two companies' executives had gotten to know each other during the "thousands of hours" they spent together over the several months preceding the announcement.
   "One of the strong attributes of the Trammell Crow Company is their culture, which attracted us years ago," said White, who counted Trammell Crow as a customer of his in his early days in the business. "Trammell Crow

Robert Sulentic (below), chairman and CEO of Trammell Crow, will stay on as a group president within CBRE. Trammell Crow's Dallas headquarters is both a skyline and industry landmark.

then was recognized as the place some of the smartest people in the real estate industry built their careers. That hasn't changed. It is a culture of integrity, hard work, doing what's right, not what's expedient. And it will marry well with the culture of our own firm. Those are the things we think about first when we think about large M&A."
   Waters too lauds the increased bench strength the merger represents, and he's been going up and down that bench, having logged close to 60,000 miles of travel in two months, spending just two days at home in the entire month of October. He points out that some of that time was devoted to his non- merger mission to carve out an industrial occupier/tenant rep practice with CBRE's 750 brokers.
   "Dedicated advocacy is where it's going in the market," he says. "My mission is to make sure we're one of the more robust tenant rep platforms in the industry."
   White said the Trammell Crow brand will go on with the development company only, with the services side being folded into the CBRE brand. Of the development side, he said, "It will be a relatively small component of our revenues, about 3 percent, but it is a terrific business, and one populated by some very sharp folks." Robert E. Sulentic, chairman and CEO of Trammell Crow, will join CBRE as group president with responsibility for the development business and for the company's EMEA and Asia- Pacific operations.
   "CB Richard Ellis is the perfect fit," said Sulentic in an official statement. "We're particularly excited about uniting the two firms' transaction management strength, corporate outsourcing and institutional expertise."
   Trammell Crow and Principal Real Estate Investors had announced in summer 2006 a national office development program focused on the development of $750 million to $1 billion of new, Class A office buildings in markets throughout the United States over the next five years. Trammell Crow spokesperson Barbara B. Bower confirms that the program will proceed with no change.
   According to its press release, CBRE plans to issue $2.2 billion of term loans to finance the transaction, and will also amend or refinance its existing $600- million revolving credit facility. CBRE plans to sell Trammell Crow's approximately 20- percent ownership interest in Savills, plc, a real estate services provider in the United Kingdom.
   Since January 2006, in addition to the capstone Trammell Crow deal, CBRE has celebrated acquisitions of retail specialists in Belgium and the Netherlands, Noble Gibbons in Russia, Wisconsin firm The Polacheck Co., industrial real estate specialist Holley Blake in the U.K., building consultancy Rietmeijer & Partners B.V. in the Netherlands, and Corporate Property Management Services (CPMS) and building consultancy Artequation in France. Asked about the intricacies of "merging mergers," Waters and McGrath both point to the successful integration of Insignia, and to the fact that top performers, even across international boundaries, can find common ground quite quickly.
   "If you share the same values, that can go a long way toward making things go smoothly," says McGrath. "Insignia went that way, and Trammell Crow is going that way."
   Robert F. Duncan Jr, BCCR, SLCR, CCIM, senior vice president for CBRE in Ontario, Calif., and S. Bleecker Totten, senior managing director for CBRE in Saddle Brook, N.J., are IAMC members, as is Rob Metcalf, senior vice president for Trammell Crow in Atlanta.