CBRE Secures Two Big Contracts Totaling 77 MSF

CBRE has been chosen by HSBC Holdings PLC to take on the role of exclusive global strategic property portfolio manager for the financial company's 72 million-square-foot international portfolio.
Courtesy Flickr Creative Commons user nbndiep

August 1, 2011
By Barbra Murray, Contributing Editor

The wave of multi-million square-foot contract activity in the commercial real estate services industry continues as CB Richard Ellis Group Inc. makes two big announcements. CBRE has just been chosen by HSBC Holdings PLC to take on the role of exclusive global strategic-property portfolio manager for the financial company’s 72 million-square-foot international portfolio and the firm was also selected to provide full service outsourcing services for Union Bank N.A.’s group of properties encompassing five million square feet.

As portfolio manager for HSBC, CBRE will provide the bank with guidance on its portfolio of 7,500 properties spanning 87 countries, and will also serve as a regional transaction partner for assets in Europe, Asia, North America and Latin America.

CBRE’s outsourcing contract with Union Bank calls for the firm to take on responsibility for a range of real estate activities, including facilities management, transaction management, project management and consulting and lease administration services. The bank’s portfolio consists of 400 properties in California Oregon, Washington, Texas and New York.

CBRE’s third-party services responsibilities has expanded by millions in just the last several weeks. Most recently, the firm secured a contract to provide property management services for IndCor Properties Inc.’s 22 million square-foot national industrial portfolio. Days before the IndCor news emerged, CBRE announced that it had been chosen by the U.S. Postal Service to be the exclusive provider of strategic corporate real estate solutions for the quasi-government agency’s 300 million-square-foot group of owned and leased retail, processing and administrative facilities. On the international front, in June, London-based PRUPIM tapped CBRE to spearhead management and accounting services for the global real estate investment management company’s 45 million square-foot U.K. portfolio. The deal marked one of the largest property management outsourcing agreements in the U.K. — and in EMEA, for that matter — in history.

“Outsourcing revenues increased 13 percent with double-digit contributions from all geographies,” Brett White, CEO of CBRE, said during the company’s second quarter earnings call. “We continue to see more and more companies embrace outsourcing solutions as a means of lowering costs and remaining competitive in a slow growth economic environment. Demand remains high for global mandates and is growing in Europe and Asia where outsourcing is a newer concept.”

Indeed, for real estate assets at home and abroad, the number of companies awarding gargantuan third-party services assignments appears to be on the rise. In July alone, including the CBRE deal, IndCor doled out four mega-contracts. The industrial real estate company chose Taylor & Mathis of Florida L.L.C. to oversee leasing at its 1.2 million square-foot Tampa portfolio; Jones Lang LaSalle to lease a group of properties encompassing nearly 5.7 million square feet in the Atlanta, Charlotte and Miami areas; and Cassidy Turley to manage a 7.8 million square-foot, seven-city portfolio in the Central U.S. In June, Sumitomo Corporation of America called on Transwestern to serve as exclusive property manager for a group of assets totaling nearly 1.6 million square feet in Arizona, Miami, San Francisco and Washington, D.C.

* This story was updated on August 1, 2011, at 4:31 p.m. EST.