Koll Co. to Acquire Chicago Property Management Firm : Merger: The Newport Beach company sees its purchase of Rubloff Inc. as a means to become one of the dominant players in the industry.

Koll Co. said Monday it has agreed to acquire a Chicago property management company and merge it with its own Koll Management Services subsidiary, making it the nation’s third-largest property manager.

The merger with Rubloff Inc. will add 30 million square feet of office buildings and other properties to the 70 million square feet already managed by Koll Management Services in Newport Beach. Neither company would comment on the price or other terms of the deal except to say that it is expected to close in July.

Koll clearly sees the transaction as a means to become one of the dominant players in the industry.

“Rubloff is very strong in the central part of the country, and we are strong on the West and East coasts,” said Bill Rothe, Koll Management’s president. “The geographic synergy of this deal is self-evident.

“But the deal also reflects the difficulties of the property management industry, where customers are expecting more service at the same or declining fees,” he said.

Willard A. Brown, Rubloff’s chairman and chief executive, said that increased competition, declining lease rates and the demand by clients for nationwide service prompted his company to consider a merger.

“We have always created strategies to survive into the future, so consolidation with another company that matched our culture and geography seemed like the logical thing to do,” he said.

Privately held Rubloff is profitable, Brown said, but he would not disclose specific revenue or earnings figures for the company, whose majority owners are its top employees. The company has about 400 people on its payroll.

The new entity, Koll/Rubloff, will be based in Chicago and will provide property management and corporate real estate service in the Midwest, Southeast and Southwest. Rubloff has no operations in California.

Howard Weinstein, president of Rubloff, will serve as president of Koll/Rubloff and will report to Rothe. Rubloff’s Brown will resign but will stay on as an adviser to Koll/Rubloff.

Rubloff and Koll Management both have offices in a number of the same cities, including Chicago, Dallas and Atlanta. Rothe could not say Monday how those operations will be merged or if any employees of either company will be laid off.

“It usually takes six months to a year to mesh organizations together,” he said. “If we are able to grow and produce synergies at the company, we’ll need more people, not less.”

Brown said that five to eight administrative positions at Rubloff will be eliminated but that he foresees no additional cuts.

A stock analyst who follows Koll praised the merger.

“They are building market share, and there are some economies of scale they will be able to take advantage of,” said Mark Matheson, an analyst at the Los Angeles-based brokerage Crowell, Weedon & Co. in Los Angeles. “When the real estate market turns around, they will be sitting pretty.”

In Monday’s trading on the NASDAQ market, Koll Management’s stock closed at $9 a share, up 25 cents, in light trading.

Rubloff is the largest acquisition yet for Koll Management, which went public in July, 1991. The company has purchased six other property management firms in the past two years but failed in a bid late last year to acquire Tishman West in Los Angeles. That deal would have added 20 million square feet to Koll’s management portfolio.

After the merger with Rubloff, only Dallas mega-developer Trammell Crow and brokerage Cushman & Wakefield will be larger than the new Koll entity.