Koll and Chicago’s LaSalle Said to Be Talking Merger
Koll, the large Newport Beach property manager, is discussing a possible merger with LaSalle Partners, a major property management firm in Chicago, sources said.
A merger between LaSalle and Koll, a privately held firm that manages more than 600 properties nationwide, would create one of the nation’s biggest such companies. If the merger goes through, the new company would consider becoming public, sources said.
For the record:
12:00 a.m. Feb. 22, 1996 For the Record
Los Angeles Times Thursday February 22, 1996 Home Edition Business Part D Page 2 Financial Desk 2 inches; 43 words Type of Material: Correction
Koll--Koll, a privately held Newport Beach-based real estate firm, is discussing a possible merger with Chicago-based LaSalle Partners, sources said. Publicly held Koll Real Estate Group, a different company, is not involved. A story in some Wednesday editions incorrectly identified the company.
While neither company would confirm the merger discussions, sources close to the talks said a combination would enable the two companies to reduce overhead costs and duplication.
“There is a general feeling this industry will continue to consolidate,” said William Rothe, president and chief operating officer with Koll in Newport Beach. “I would not be surprised if two of the top 10 property management firms would get together in the next 18 months.”
While both Koll and LaSalle rank in the top 10, Rothe said he could not comment on merger discussions.
LaSalle Partners manages 210 million square feet of property nationwide, according to a recent survey.
Koll, which has 2,500 employees nationwide, manages a 173-million-square-foot portfolio in at least 25 states and an investment portfolio valued at $1.75 billion.
Once known as Koll Management Services, the company went public in 1991 on the Nasdaq market, but floundered. Falling rents and rising office vacancies during the real estate downturn hampered profits. The company went private in 1994 and became simply Koll.
Armed with a $50-million credit line, Koll has expanded in recent years. In 1993, Koll bought Rubloff Inc., a Chicago property manager, doubling the size of Koll’s portfolio. Rubloff managed 88 buildings in 14 cities.
Koll founder Donald M. Koll and Los Angeles investment bank Freeman Spogli & Co. each holds a 36% stake in the company. Donald Koll had owned 48% of the company, but several months ago sold a 12% stake to Apollo Real Estate Advisors.
Donald Koll also controls a mushrooming group of real estate companies in Orange County.
He owns a majority stake in the Koll Co., a separate holding company, and a stake in Koll Real Estate Group, a publicly traded firm that has sunk about 70% of its assets in a controversial swath of 1,600 acres of Bolsa Chica wetlands. Also included is Koll International, a wholly owned subsidiary of Koll Co., which develops real estate in Mexico and other countries.
