Trammel Crow Bought by CB Richard Ellis
The world's largest commercial real estate services company, the CB Richard Ellis Group, announced on Tuesday, October 31 that they will buy rival Trammel Crow for a price of $1.79 billion creating a company with approximately $4.4 billion in annual revenue and some ten percent of the commercial real estate market.

Trammel Crow built many of the high rise buildings in downtown Dallas, Texas as well as the Lowe's Anatole Hotel and the Dallas Market Center. CB Richard Ellis will pay $49.51 per share in the purchase, a premium of some 27 percent over Trammel Crow's closing price on Monday, October 30.

The president and chief executive of CB Richard Ellis, Brett White, said in a statement, "Our strategic objective has long been to create the market-leading commercial real estate services firm. Well-targeted acquisitions have played a pivotal role in our strategy."

CB Richard Ellis had a net income in 2005 of $217.3 million on sales of $2.91 billion. The company has 14,500 employees compared to Trammel Crow's 6,800. Net income from Trammel Crow in 2005 was some $59.4 million on sales of $895.9 million.

The acquisition will allow CB Richard Ellis to generate a more consistent stream of revenue from long-term contract arrangement and will make the company less dependent on "one shot" sales of properties and on income from leasing fees.

Trammel Crow Chairman and CEO Robert Sulentic will join CB Richard Ellis as a group president while Trammel Crow's development and investment business will become a wholly owned subsidy with independent operations.

The boards of both companies have approved the proposed deal that is expected to be finalized late in 2006 or early in 2007.