CB Commercial, Richard Ellis merge.

CB Commercial (NYSE:CBQ), North America's leading commercial real estate services company, and REI Limited, the premier property services firm that operates outside of the United Kingdom as Richard Ellis, announced that the combined company will operate as "CB Richard Ellis."

CB Richard Ellis will now have over 8,000 employees in more than 200 principal offices in 29 countries. CB Commercial has 147 offices in the United States, Canada and Mexico.

"Whether it's in the U.S. or around the world, we are where our clients want us to be," said Jim Didion, CB Commercial's chairman and CEO, who retains those posts at the new CB Richard Ellis. "We're excited to have created the first commonly owned, commonly managed global real estate services firm. As one company, CB Richard Ellis is much more than a loose association or network of separately owned firms - it's a real marriage born of a common vision and philosophy about the best way to help clients navigate the increasingly complex world of real estate decision-making. All of our clients should benefit from the merger, no matter the size or the scale of their requirements."

Barry White, REI's chief executive, who is now vice chairman of CB Richard Ellis's Global Operations Management Board, said "This is a great time to be in the real estate services business, and a great time for Richard Ellis to join with CB Commercial. CB Richard Ellis provides our professionals with the best possible platform to deliver service, and our clients with the most comprehensive portfolio of corporate real estate and investment services available anywhere."

According to Steve Swerdlow, senior managing director of CB Richard Ellis, who oversees the New York tri-state region, the merger is the most exciting thing to happen since he's been with the company.

"CB Richard Ellis is now the only truly global real estate services provider with its own offices in virtually every major market of the world, allowing our people to be more prepared than ever to respond to the needs of our clients," he said. "CB Richard Ellis is now poised to offer consistent, reliable service across all facets of the real estate business - and services that are customized and that make sense for our clients."

"CB Richard Ellis can offer its clients unparalleled information about the global real estate market - information that is highly valuable in the investment decisionmaking process," Swerdlow added. "The merger is expected to impact our business significantly, especially since New York is the gateway to a lot of corporate service and investment business."

CB Richard Ellis views the potential for growth in today's global business arena as considerable. Multi-national corporations are outsourcing an ever-larger share of their non-core business activities, including real estate operations and the strategic planning of facilities management and transaction management.

"The growth of companies through mergers and acquisitions is accelerating the rationalization of real estate and the outsourcing of real estate services by businesses whose principal focus is in some other area," Didion said. "The initial drive to outsource was to lower costs, but the concept has evolved to reflect the recognition that quality and continuity of service must be dominant considerations. Through our various quality control systems, other practices and platforms, and the company's cross-border strategic management capabilities, CB Richard Ellis can deliver the quality and continuity that multinational corporate clients require."

CB Richard Ellis boasts a global client list that includes a diverse array of corporations, including: AT&T, American Express, Bank of America, Bristol Myers Squibb, Cadence, Chase Manhattan, Ford, General Motors, IBM, Kodak, Nortel, Sun Micro Systems, Sybase and Whirlpool, to name just a few.

Another driver behind the CB Commercial/Richard Ellis merger is the increasingly global nature of real estate capital markets, including the investment property sales business in which CB Richard Ellis is a world leader as ranked by consideration value. Once unusual, offshore activities are increasingly common for strategic real estate investors, including Wall Street firms and real estate investment trusts (REITs).

"Institutional investment generally, and real estate investment specifically, is increasingly viewed in a global context," White said. "CB Richard Ellis is able to service cross-border real estate investors with on-the-ground experience and a global service capability that are unequaled in the industry. Further, our local market knowledge worldwide is the basis of a wealth of research and information that is critical to sound real estate decision-making in today's marketplace."

With over 6,700 employees, CB Commercial had 1997 revenues of $730 million, while PEI, with approximately 1,500 employees, reported 1997 revenues of about $119 million. The firm is widely recognized as a world-market leader in the sales and leasing of income-producing property, property and corporate facilities management, corporate advisory services, mortgage banking, investment management and capital markets, appraisal/valuation and market research.

In the United Kingdom, CB Richard Ellis does business under the name CB Commercial Limited. CB Richard Ellis will continue to be listed on the New York Stock Exchange under the ticker symbol "CBG."

Explaining the rationale for the firm's new name, Didion said "The name CB Richard Ellis was a natural. It allows us to take advantage of two already well-established brand names in a way that creates immediate positive recognition around the world. The CB Richard Ellis name also communicates our expanded market strength and capabilities, and it assures clients of both firms that the service they have come to depend on will continue and, in fact, be further enhanced."

The company also said that in the interest of common branding, its property management arm, which his been known as CB Commercial/Koll Management Services, will operate under the CB Richard Ellis name. The firm manages over 200 million square feet of property for institutional, investor and individual clients.