45 Million Square Feet now Under Management on Behalf of REITs

One year ago, CBRE rolled out a major new platform to provide REITs with property management services, offering operational efficiencies and cost savings. The program has since met with great success, with CBRE announcing that over 45 million square feet is now being property managed on behalf ofpublicly-traded REITs. The Company also has an active pipeline of opportunities with other REITs.

The program is headed by Drew Genova and Steve Bassett of CBRE’s Strategic Account Group, which provides institutional and investor clients with a single point of contact for CBRE’s various operational resources.

“We are very, very pleased with the excellent reception to our REIT-oriented program,”said Mr. Genova, executive managing director, CBRE, “as we had identified early on that many REITs could achieve significant cost savings, staffing solutions and pricing benefits by leveraging CBRE’s asset services platform.”

Indeed, according to Sonya Huffman, head of real estate operations for Gramercy Property Trust, a REIT client of CBRE, “CBRE’s property management, engineering and transition services supporting roughly 7.0 million square feet was an excellent partner, collaborating with us under a tight time frame, to meet the complex demands associated with the merger of the Chambers Street portfolio.”

This REIT initiative was bolstered by a study undertaken by David M. Fick, professional faculty member at the Johns Hopkins University Carey Business School, and commissioned by CBRE Group, Inc., that found a REIT can realize significant efficiencies with professional, third-party property management.

The study identified the value proposition in typical cost savings associated with outsourcing property management compared to internal property management, including:

• 62 percent savings in onsite management costs (direct labor)
• 24 percent management fee savings
• 13 percent in savings for HVAC maintenance
• 10 percent savings in utility costs

“Our early success with this program verifies what we in property management, leasing, and accounting have believed for some time—that our services can provide REITs with a real strategic advantage,”added Mr. Bassett, executive managing director, CBRE.

About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2015 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.