Official announcement: CBRE is moving its headquarters from downtown Los Angeles to Dallas.
Rumors of the move were reported on Wednesday but confirmed in an internal memo to CBRE employees on Thursday. Bisnow Have learned.
“Designating Dallas as CBRE's global headquarters formalizes how we have operated over the past eight years,” Lou Horn, president of CBRE's Pacific Southwest Advisory Services, said in a statement. Stated.
CBRE's former headquarters in Los Angeles
While this move is an important symbolic move, it does not signal an immediate mass exodus of CBRE employees from Los Angeles or California. Rather, it is a great investment in the state of Texas.
“We have more than 5,000 employees in California, and we have a very small number of operational roles that we plan to migrate to Dallas over time,” Horn said, adding that customer-facing roles will not be affected. he added.
CBRE said in a public statement that its Dallas employment base has already expanded significantly and is expected to continue to grow. The company did not mention the move during its earnings conference Thursday afternoon and declined to comment beyond the statement.
CBRE's ties to Texas are well-established. The company's CEO, Robert Salentic, has roots in Texas as the former CEO of his Dallas-based Trammell Crow. CBRE acquired Trammell Crow in 2006. The Dallas Business Journal, which first reported the change in headquarters, said Slentic was named CEO in 2012 and has been splitting his time between Los Angeles and Dallas since then.
The move doesn't surprise John Boyd, a site selection expert and president of Boyd, a Princeton, New Jersey-based firm that helps businesses relocate. Financial instability in the City of Los Angeles, which faces a revenue shortfall of up to $600 million, and a ballot measure to raise state taxes on commercial and industrial properties based on current market values are just a few of the larger reasons. Only. Boyd said companies may choose to exit the market.
Boyd said CBRE's escape is significant because of its huge size and market presence. In the Fortune 500 list he is ranked 128th, and the number of employees exceeds 100,000. The company has faced coronavirus-related challenges, with third-quarter revenue of more than $5.6 billion, down 4.7% from the same period last year. Earnings for the quarter were $184.8 million, down from $259.6 million in the year-ago period.
“CBRE's move would be a serious indictment on California's business environment,” Boyd said.
Boyd said CBRE's move to Dallas will not only benefit CBRE from its own cost savings, but will also allow it to attract and retain talent. Housing costs are low in Dallas, and throughout Texas, and numerous studies have shown that this is a major factor in many Californians leaving the state in recent years.
“Today's headquarters relocation isn't just about reducing operating costs and moving real estate. It's also a way for companies to recalibrate their image and brand in the marketplace,” Boyd said.
Rumors about CBRE moving to Dallas-Fort Worth began circulating a year ago, said Sam Ware, DFW-based developer and CEO of Drien Opportunity Partners.
Ware said he expects more corporate relocations of this size will occur as DFW's economy outperforms the Tier 1 real estate market, which deals with political and financial instability.
“I think this shows they're tired of liberal California politics, taxes, rights, corrupt judges and government,” Ware said of CBRE's move.
To persuade companies to relocate, Ware redeveloped J.C. Penney's former Plano headquarters into a large corporate center known as The Campus at Legacy West in Plano. Over the past few years, DFW has relocated several major companies from California, including Toyota, McKesson, and Charles Schwab.
“We're going to see millions of square feet relocated in the next 12 to 24 months,” Ware said of North Texas. “Some of it will be built separately, which will take him two to three years, but some of it will be built separately, which will take him two to three years. [of them] If immediate occupancy is required within 6 months. Legacy West's campus has the ability to meet that need. ”
Kerri Panchuk contributed reporting to this article.
