2 Property Management Firms to Merge Portfolios : Real estate: The tentative agreement between Koll and Tishman West would bring 60 million square feet of office and industrial space under one roof.
Two of Southern California’s most prominent property management firms said Monday that they will plan to merge their portfolios, bringing 60 million square feet of office and industrial space under one roof.
Under the tentative agreement, Koll Management Services Inc. in Newport Beach--a unit of Orange County developer the Koll Co.--would acquire all of Tishman West Management Corp.’s management contracts. Tishman is the general partner of developer Tishman West Cos., based in Los Angeles.
“With so many developers today going into the property management business, the market has become increasingly competitive,” said Alan D. Levy, president of Tishman West Cos. “We feel that, by combining forces, we can provide better services at less cost.”
Financial terms of the agreement were not disclosed. The merger is contingent on Tishman’s purchase of the interest of its partner, Balcor Co., a developer and property manager based in Chicago.
Levy said that the deal with Koll Management should be finalized by fall. “We are hopeful that (Valcor) will sell its interest to us,” he said.
Koll Management has focused on industrial and mid-rise office buildings in suburban areas, while Tishman has specialized in high-profile urban office towers. Among the more prestigious buildings that Tishman manages are downtown Los Angeles’ two 52-story Arco Plaza skyscrapers and the 55-story Security Pacific Plaza.
“Our portfolios will complement each other nicely,” said William Rothe, president of Koll Management.
The new division of Koll Management, Koll/Tishman, would oversee the 20 million square feet of office space now managed by Tishman, as well as two-thirds of Koll Management’s current portfolio of 60 million square feet.
All of Koll/Tishman’s properties would be in California, Washington, Oregon, Arizona, New Mexico and Colorado. Koll Management would continue to manage its 20 million square feet of properties in states east of the Mississippi River.
