Koll Management Plans Merger : Growth: Melding with Dallas-based firm will boost the Irvine-based company to fourth nationally among property management organizations.

Koll Management Services Inc. said Thursday it will merge with a Dallas property manager in a deal that will boost Koll to fourth place among the nation’s property managers.

In return, Koll--now No. 7--will pay Swearingen Co. the first year’s earnings from its former property management unit, Swearingen Management Co.

Swearingen is one of the Southwest’s biggest commercial real estate brokerages. It wants to sell the property management unit, Koll said, because the two businesses sometimes pose a conflict of interest: The brokerage represents tenants looking for the best deals on office and factory space, while the property management arm works for the landlords.

So Swearingen, Koll said, didn’t want to spend the money to build the property management business. Irvine-based Koll Management, on the other hand, does nothing but manage property. It was founded by the big, privately held Newport Beach developer Koll Co. but is a separate, publicly held company.

Koll will push that fact in the Southwest, where most property managers, Koll said, are owned by developers or brokers with a potential for conflicts of interest.

Koll Co., the developer, began to expand rapidly into property management in the past few years as the market for commercial real estate became glutted and there was little demand for new buildings.

The Swearingen deal will add 4.5 million square feet to the 65.5 million square feet of property Koll Management already manages, bringing it to a total of 70 million. About half that 65.5 million square feet is owned by the development company and its partners.

The deal will double Koll’s presence in the Southwest and will be its first move into the Oklahoma market.

As for Swearingen, it will get the advantage of Koll’s deep pockets and national presence, said Glen Raiger, Koll Management’s executive vice president.

Leland Evans, former head of Swearingen Management and now a Koll vice president, said: “In this highly competitive era, we saw that the merger would give us immediate access to Koll’s professional training programs, advanced computer systems and national marketing presence.”

Koll Management has been aggressively acquiring other property managers recently, which accounts for some of the 40% increase in revenue for its latest quarter, from $6.5 million to $9.1 million.

A pending merger with Tishman West Management Corp. in Los Angeles would add another 20 million square feet, Koll said, which would boost the company up to No. 3 among property managers, behind Dallas mega-developer Trammell Crow and brokerage Cushman & Wakefield.

Koll Moves Up Koll Management Services’ acquisition of Swearingen Management Co. moves the Irvine-based firm to fourth in the nation for the amount of property it manages. The top office and industrial property management firms: Millions of square feet managed Trammell Crow: 230 Cushman & Wakefield: 102 Resources Property Management: 87 Koll Management Services: 70 ( Koll was No. 7 before merger) Hines: 67 Source: Koll Management Services Researched by JANICE L. JONES/Los Angeles Times