Real estate brokerage CBRE moves headquarters from Los Angeles to Dallas
CBRE Group, the country’s largest commercial real estate services company, said Thursday that it has moved its headquarters from Los Angeles to Dallas.
The international business has more than 100,000 employees and is a Fortune 500 firm. It has a long history in California, but Dallas has been its de facto headquarters for nearly a decade as its largest operating center and the home to many senior executives, including Chief Executive Bob Sulentic.
Few workers will transfer from California to Texas, the company said, and the move will not result in layoffs.
“Designating Dallas as CBRE’s global corporate headquarters formalizes how our company has been operating for the past eight years,” Lew Horne, head of operations in the Southwest, said in a statement.
It has not been uncommon for large companies to move their headquarters out of California, as the state often proves more appealing to start-ups than big established firms. Each loss raises fears of less local hiring, spending, civic engagement and bragging rights.
Company headquarters departing “is the story of California,” said economist Richard Green, director of the USC Lusk Center for Real Estate.
“We have been losing corporate headquarters for a long time, particularly here in Southern California,” Green said. “But we have a history of creating really small companies and turning them into really large companies.”
California attracts a large share of the country’s venture capital, he said, and is one of the largest producers of start-up businesses in the country.
“So long as we are really good at creating new businesses, our economic health will be fine,” Green said.
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Last year Parsons Corp., an engineering, construction and cybersecurity firm, announced a move from Pasadena to Washington, D.C., to be closer to key customers.
Toyota Motor Corp. moved its North American headquarters from Torrance to the Dallas suburb of Plano in 2014. The automaker said the shift let it move its brainpower closer to its manufacturing base, primarily in the South.
Little will change for CBRE’s business operations, which include brokering sales and leases of offices, warehouses and other commercial properties, Sulentic said in a telephone interview from Texas.
“Dallas, Los Angeles and New York is where our biggest action is,” he said. “Nothing is changing other than Dallas is going to be our formal headquarters now.”
The announcement came in conjunction with reporting of the company’s third-quarter financial results. The move was planned to be announced earlier but was delayed by the pandemic, Sulentic said.
“We thought it would be confusing,” he said. “Then it looked like COVID was going to go on for a while, so we did it in conjunction with the earnings release.”
COVID-19 echoed through the third-quarter regional office market as businesses remained closed. Office occupancy fell, sublease space on the market jumped.
CBRE reported third-quarter net income of $184 million, or 55 cents a share, down 28% from a year earlier. Revenue was $5.6 billion, down nearly 5% from a year earlier as the pandemic depressed the company’s sales and leasing business.
CBRE said net income and earnings per share reflected about $55.4 million of cost cutting.
Its shares Thursday rose $7.28, or 17%, to $51.30.
CBRE traces its roots to the firm of Tucker, Lynch & Coldwell, founded in 1906 in San Francisco. It later became known by a much more familiar name in the real estate industry — Coldwell Banker.
Coldwell Banker evolved into CB Commercial. In 1998, the company changed its name to CB Richard Ellis, and in 2011 it became CBRE Group. It has been a public company since 2004 and its shares trade on the New York Stock Exchange.
