CB Commercial to Acquire Westmark Realty : Real estate: Deal between L.A. firms will create $4-billion portfolio of managed property.

In a further consolidation of the real estate management industry, CB Commercial Real Estate Group said Wednesday that it will buy Westmark Realty Advisors, putting $4 billion in managed property under one roof.

The deal between the two Los Angeles-based companies has been under discussion for months, amid industry rumors that Westmark faced financial troubles. Both companies denied that Wednesday, saying the deal has strategic benefits for both sides.

Despite writing down the value of its clients’ now-$3-billion portfolio by nearly a third as real estate values have sunk nationwide, Westmark itself has “come through the last four years in a very profitable position,” said Vincent F. Martin Jr., chief managing officer of Westmark.

But he said many of Westmark’s pension fund clients, which pay the firm to invest in and manage properties on their behalf, have expressed interest in real estate investments away from the traditional buy-and-hold properties in which Westmark has specialized.

“We needed a way to broaden our product line,” Martin said. Access to CB’s extensive mortgage servicing and property brokerage operations, for example, could “open the way to developing new products on the debt side of the real estate market,” he said.

Jim Didion, CB’s chief, said his firm was attracted to Westmark “not only for the existing [real estate] portfolio, but for the people.” Martin, now 53, was with CB’s predecessor firm, Coldwell Banker, from 1970 to 1981, when he left to form Westmark.

Privately held CB will buy the equity in Westmark held by the firm’s 37 principals, including Martin. CB will pay an undisclosed sum upfront and the rest over six years, contingent on performance, Martin said. The companies declined to reveal the total transaction value.

Westmark operates primarily through TCW Realty Advisors, a joint venture with money management giant Trust Co. of the West, also based in Los Angeles.

TCW said it supports the deal and would work with CB and Westmark on new real estate investment products. TCW Realty will remain a joint venture of CB-Westmark and TCW.

CB was part of Sears, Roebuck until it was taken private in 1989. The firm has been pushing heavily into property management in recent years, at a time when other real estate firms have been folding or merging in the face of declining property values. Many analysts believe the market’s slump has largely run its course.