Business

Jobs, Benefits, Business Model, Founding Story

CBRE is a global real estate and capital markets advisory services provider. It seeks to assist its clients in efficiently and effectively managing their property portfolios.

CBRE traces its history back to 1906 and the foundation of Tucker, Lynch & Coldwell, the Company’s earliest predecessor company. The Company expanded its operations during the early 20th Century, and by the 1940s was among the largest commercial real estate services companies in the western US. In 1989 the Company was bought out by its employees and began operating under the name CB Commercial.

Throughout the 1990s, CB Commercial continued to expand, making a number of key acquisitions, including those of Westmark Realty Advisors, L.J. Melody and Company, and Koll Real Estate Services. The Company went on to establish itself as the first real estate services firm with a platform to deliver integrated real estate services.

CBRE continues to be one of the most well-known and well-respected real estate services companies in the world. It is ranked 259th on the Fortune 500 list and trades a portion of its shares on the New York Stock Exchange. The Company has a current market capitalisation of $9.66 billion.

Business model of CBRE

Customer Segments

CBRE provides a broad range of services and solutions to customers operating in the real estate sector. The Company’s clients include commercial and institutional property owners, property managers, and real estate investors across multiple business sectors, including:

  • Retail, including retail property owners, occupiers, and investors across local, national, and international markets;
  • Energy, including various energy producers, utility companies, and renewable energy businesses;
  • Industrial and Logistics, including companies with supply chain logistics, manufacturing, assembly, research and development, distribution and warehouse facilities, and land assignments;
  • Healthcare, including healthcare providers, medical facility operators, and research and life science companies; and
  • Government, including local, state, and federal government bodies and public institutions.

CBRE additionally provides investment management services to various institutional clients, including pension funds, insurance companies, sovereign wealth funds, foundations, endowments and other institutional investors. CBRE includes a number of high-profile companies among its customers, including Maersk, Citigroup, Alibaba, Sprint, and Standard Chartered Bank.

CBRE serves an international client base, however, the majority of its business is conducted in the US. The Company also serves customers across Europe, Asia Pacific, Latin America, the Middle East, and Africa.

Value Propositions

CBRE provides value to its clients in the following ways:

  • Its industry standing and reputation, with the Company established as a leading provider of real estate advisory services across various international markets, with its standing demonstrated by its ability to attract business from market-leading companies such as Maersk;
  • Its broad range of services, with the Company offering a broad portfolio of services to customers across multiple industries, including advisory and transaction services, asset services, and global workplace solutions;
  • Its international reach, with the Company serving an extensive domestic client base in the US, as well as conducting substantial business across Europe, Asia, the Middle East, Africa, and Latin America;
  • Its research and technology-backed services, with the Company utilising research and technology, including analytics, to develop effective and efficient services for its customers; and
  • Its industry expertise, with the Company employing highly-qualified professionals across its multiple operating segments, and a team of experienced industry executives.
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Channels

CBRE operates a website at www.cbre.com, through which it provides information on its various services, target industries, and locations. The Company does not operate an online sales channel for its service, nor does it provide an online customer portal for its clients.

CBRE provides services directly to its customers through its international workforce of consultants and advisors, with full-service operations in major metropolitan areas throughout the world. The Company’s employees operate out of the Company’s network of more than 400 offices worldwide, including in the US, Australia, Mexico, Israel, Hong Kong, Spain, Taiwan, and Venezuela. This includes services provided under the Company’s CBRE brand name, investment management services under the CBRE Global Investors brand name and development services under the Trammell Crow Company brand name.

CBRE additionally provides services to its customers through a network of affiliates across various jurisdictions, to which the Company licenses the CBRE name in their local markets in return for payments of annual or quarterly royalty fees.

Customer Relationships

CBRE does not provide services to its clients on a self-service basis, and does not provide an online customer portal. Instead, the Company serves its customers directly through its workforce of more than 70,000 employees, who work closely with clients to establish a detailed brief for each individual project and contract. CBRE provides tailored services, seeking to establish longstanding and close relationships with its customers, securing recurring business from many of its larger clients.

CBRE’s clients are typically provide an account management team or account executive, who is able to provide personalised support on an ongoing basis. Customers are also able to access personalised assistance and responses to queries by contacting the relevant office or department by email or over the phone. Additionally, the Company offers a range of online resources intended to provide additional information and support, including various research papers and reports.

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Customers are also able to follow the Company’s activities and developments, and interact with its staff directly, through its various social media accounts, including with Facebook, Twitter, Google+, and LinkedIn.

Key Activities

CBRE is a holding company. Through its various subsidiary companies, it is engaged in the provision of real estate and capital markets advisory services.

The Company aligns its operations into five reportable business segments, organized largely by geographic region: The Americas; Europe, Middle East and Africa; Asia Pacific; Global Investment Management; and Development Services. CBRE offers commercial real estate services under the CBRE brand name, investment management services under the CBRE Global Investors brand name and development services under the Trammell Crow Company brand name.

The Company’s core services concern commercial property, corporate facilities, project and transaction management, property and agency leasing, capital markets solutions, real estate investment management, valuation, development services and proprietary research. CBRE serves a broad network of clients, including property owners, investors, and occupiers across multiple business sectors.

Key Partners

CBRE works in conjunction with a network of partner companies and organisations around the world, which support, supplement, and extend the Company’s own in-house capabilities. These partners can be categorised broadly as:

  • Supplier and Vendor Partners, including suppliers of technologies, tools, equipment, and services that are utilised across the Company’s entire enterprise, as well as companies to which certain non-technical functions can be outsourced;
  • Affiliate Partners, comprising a network of independent affiliates to which the Company licenses its brands in local markets in return for the payment of royalty fees and an agreement to cross-refer business;
  • Joint Venture Partners, comprising a number consulting companies and other service providers with which the Company jointly provides services through mutually owned entities;
  • Strategic and Alliance Partners, comprising a range of market-leading companies across multiple sectors, with which the Company shares certain resources and collaborates on joint projects; and
  • Community and Social Partners, including a range of charitable organisations and non-profits with which the Company collaborates on social and community projects.
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CBRE has a number of partnerships in place. This includes a partnership with Delos to develop indoor environments that promote health and well-being, a community partnership with Plan International, and a local tie-up in Malaysia with WTW.

Key Resources

CBRE’s key resources are its brands and intellectual properties, its IT and communications infrastructure, its network of affiliates and partners, its physical infrastructure, and its personnel.

CBRE owns a number of intellectual properties, including trade names and trademarks such as CBRE and Trammell Crow. The Company has also developed a number of proprietary technologies for the provision of complex services and analysis through its global outsourcing business, and provides proprietary research to clients through its CBRE-EA research unit. The Company, however, has chosen not to protect these proprietary technologies with patents.

CBRE also owns and or leases a number of properties around the world. This principally comprises its network of more than 400 offices across the Americas, Asia Pacific, Europe, Africa, and the Middle East.

Cost Structure

CBRE incurs costs in relation to the development of its technologies, the maintenance of its IT and communications infrastructure, the management of its affiliates and partnerships, the implementation of marketing campaigns, the operation of its network of offices, and the retention of its personnel.

In 2015 CBRE recorded total costs and expenses in the amount of $10.03 billion. This included cost of services totalling $7.08 billion, and operating, administrative, and other costs totalling $2.63 billion.

Revenue Streams

CBRE generates revenue through the provision of various advisory services, including commercial property, corporate facilities, project and transaction management, property and agency leasing, capital markets solutions, real estate investment management, valuation, development services, and proprietary research. The Company principally derives revenue from the collection of management fees, commissions on transactions, and other contractual service revenue.

In 2015 CBRE generated revenue for the year of $10.86 billion, up on the $9.05 billion recorded by the Company in 2014. The majority of the Company’s revenue was attributed to its Americas segment, which alone generated $6.19 billion. This was followed by the Company’s Europe, Middle East and Africa segment, which generated $3.00 billion.

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