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Reports Indicate Merger of Real Estate Brokerages

Reports Indicate Merger of Real Estate Brokerages

BY MANDY JACKSON

Staff Writer

Los Angeles-based CB Richard Ellis Services Inc. is reported to be in discussions with Illinois- and New York-based Grubb & Ellis Co. to buy the company.

Both commercial real estate brokerages have offices in San Diego.

Michelle Candland, managing director of CB Richard Ellis in San Diego, said, “It’s a rumor.”

Over the last two years, Candland said, there have been rumors that the company was going to be purchased, was merging with another company, or was going to buy another company.

She said she wouldn’t believe anything about a purchase of Grubb & Ellis until she received a memo from her company’s president.

Jim Munson, executive vice president and managing director of Grubb & Ellis in San Diego, said, “All I know is the first we’d ever heard was last week when there was an article in the New York Post.

“There’s a lot of questions but there are no answers.”

Victor Dominguez, managing director of corporate communications for CB Richard Ellis in Los Angeles, said the company has a policy of not commenting on rumors.

However, Grubb & Ellis corporate spokesman Tim Gallen confirmed discussions are under way, but could not say how far they’ve gotten.

CBRE Holding Inc., the parent company of CB Richard Ellis, reported a $6.1 million net loss and $224 million in revenue in the first quarter of 2002, compared to a net loss of $2.8 million and revenue of $272.5 million in the first quarter of 2001.

CB Richard Ellis was taken off the public market last year when it was purchased by a shareholder, BLUM CB Corp., an affiliate of BLUM Capital Partners LP, which included Freeman Spogli & Co. and CB Richard Ellis employees.

For the first quarter of 2002, Grubb & Ellis had a $5.2 million net loss and revenues of $58.2 million. In the first quarter of 2001, the company had a net loss of $903,000 and revenue of $80.2 million.

In April, Grubb & Ellis announced that a shareholder, Michigan-based real estate investment company Kojaian Ventures LLC, would invest $15.2 million in the company in exchange for about a 20 percent stake in the company.

In its filing with the SEC regarding the transaction, the company said it may enter into a definitive nonbinding agreement with a third party by May 31, which would delay completion of the transaction with Kojaian until September.

CB Richard Ellis employs more than 150 employees in San Diego, and more than 10,000 worldwide. Locally, Grubb & Ellis employs about 20 people, and more than 8,000 internationally.

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