CEOs of Trammell Crow, CBRE want to

reinvent the industry

Austin Business Journal - November 17, 2006

by Christine Perez

Contributing Writer

On Oct. 31, Dallas-based Trammell Crow Co. announced it had agreed to be acquired by its larger rival, Los Angeles-based CB Richard Ellis Inc., in a transaction valued at $2.2 billion. The two CEOs who engineered the megamerger, Brett White with CBRE and Bob Sulentic with Trammell Crow, helped keep the deal quiet by secretly meeting in cities like Phoenix and Denver to discuss it -- and even registering under assumed names at hotels. Trammell Crow's development group will become a stand-alone subsidiary, while the rest of the company's operations will be integrated into CBRE. The two entities will generate a total of $4.4 billion in revenue this year. The combined company will have 21,000 employees and offices in 50 countries around the globe. In addition, Standard and Poor's said CBRE will replace Fisher Scientific International on the S&P 500 Index.

In their first joint interview, White and Sulentic talked with the Dallas Business Journal about their integration plans -- and why preserving the Trammell Crow name was so important.


DBJ: Brett, why did CB Richard Ellis pursue Trammell Crow Co.?

WHITE: We've been interested in the Trammell Crow Co. for years. We're constantly looking at the competitive landscape and listening carefully to customers. If we're not perfectly fulfilling their needs, we determine whether we should invest in our own business to bring that service level to the nirvana point for customers, or are there firms in the industry that do better than we do in certain areas? We recognize there are many things the Trammell Crow Co. does equally as well as us, and some things they do better. And among all the competitors in the marketplace, our two firms matched up very well.

DBJ: Bob, what was your initial reaction to CBRE's interest?

BOB SULENTIC: Like CB, we were looking for ways to advance our case in the marketplace. We had grown to the point where we were no longer a series of local offices doing development and some one-off brokerage. We got into the outsourcing business about 15 years ago and had grown into a frontline competitor.

The nature of our customers had changed, become more global. So we had this great outsourcing offering, and we had some very good alliance partners, but we didn't have a global platform that was part of our company.

We explored the landscape for two to three years, trying to determine our best alternatives. Some were companies we would buy. Some were companies that would buy us. In the case of CB, it was obvious they would buy us.

CB Richard Ellis turned out to be the best fit, the most complementary for us and clearly for them. There also was a good cultural fit. We both have very entrepreneurial, aggressive people -- people who have learned as the two companies have gotten bigger, to team well.

DBJ: Many employees and others in the industry were stunned by the news of the merger. How were you able to keep this huge deal so quiet?