By Peter Grant
CBRE Group Inc., the world's largest commercial real-estate
services company, is negotiating to buy the division of Johnson
Controls Inc. that manages 1.8 billion square feet of corporate
real estate globally, according to a person familiar with the
matter.
The price couldn't be determined. But analysts have estimated
the value of the division--named Global Workplace Solutions--was
between $600 million and $1.5 billion.
The Global Workplace business reported revenue of $4 billion for
the fiscal year ended Sept. 30, 2014, a 4% decline from 2013. The
business provides on-site staff for managing and maintaining
commercial buildings. Johnson Controls acquired the business in
1989 from airline Pan Am Corp., which started the business to
manage airports, military bases and U.S. space centers.
Johnson Controls said last year that it had hired Bank of
America Merrill Lynch to divest the division, which it has owned
for more than 20 years, because it didn't fit with its core
businesses.
Chief executive Alex Molinaroli has been focusing, instead, on
York-brand heating and air-conditioning equipment for commercial
buildings, and on devices for monitoring and regulating electricity
usage, temperature, fire safety and security.
A spokesman for Johnson declined to comment except to say:
"We're still in the process of divesting our Global Workplace
Solutions business." A spokesman for CBRE declined to comment.
CBRE's talks to buy the division come at a time of increasing
mergers and acquisition activity in the commercial real estate
services business. Cushman & Wakefield Inc. recently hired an
adviser to put that firm on the block.
Also, Toronto-based FirstService Corp. announced plans to spin
off its commercial-real-estate unit, Colliers International, as a
separate publicly traded company. And private equities firm TPG
Capital has acquired Chicago based DTZ and Washington-based Cassidy
Turley and merged those two firms together.
Bob Tita contributed to this article
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