Dallas-based CBRE Group – the world’s largest real estate services company – is moving its headquarters.
After relocating its headquarters to Dallas from California in 2020, CBRE is moving its executive offices to the Park District building in Uptown Dallas.
The commercial real estate firm is moving into the space overlooking Klyde Warren Park that previously housed a coworking center.
CBRE will occupy 67,000 square feet of the building at Pearl Street and Woodall Rodgers Freeway.
“It’s a spectacular space,” said CBRE CEO Bob Sulentic. “Our corporate functions will be over there. We’ll have some of our global leaders over there in different parts of the business. We think we’re in late summer or early fall.”
CBRE’s global headquarters are now located in the 2100 McKinney tower, along with the Trammell Crow Co. headquarters and local offices for both companies.
CBRE’s C-suite takes over 2½ floors of offices built out in 2019 for the company’s coworking operation, Hana.
In 2022, CBRE made a 40% investment in office community, Industrious, which took over its Hana coworking locations. Industrious has three other locations in the Dallas area — including two downtown.
The coworking facility in the Park District was recently closed.
“It’s a building that we built and developed,” Sulentic said. “It’s in the part of Dallas we want to be in.”
The Park District – which includes an office tower, residential blocks and retail space – was developed by CBRE’s Trammell Crow Co. and is owned by MetLife.
“We made the investment in Industrious, and this is not one of the buildings we chose to focus on” for a coworking space, Sulentic said. “We’ve got plenty of room over there—let’s just move the headquarters over there.”
CBRE had originally planned to consolidate its headquarters and local operations into a 27-story office and retail tower to be built at the corner of McKinney and Maple avenues. But the start of construction was put on hold because of the covid-19 pandemic when office rent declined.
“We still think it’s one of the best office locations in America,” Sulentic said. “And that site is going to be built. It’s a 700,000-square-foot office building, and it doesn’t make sense right now. But we still need to have a global headquarters.”
The Park District will provide CBRE with a high-profile location at the intersection of downtown and Uptown.
Sulentic said the bulk of CBRE’s more than 100,000 employees will remain in its worldwide offices.
“We’re not a big headquarters,” he said. “We have 500 offices out there. But Dallas is officially our home now. It turns out to be a good place for us.”
Sulentic said the headquarters could eventually end up in the McKinney Avenue tower when it is built in the future.
Along with other major commercial real estate firms, CBRE saw its revenue and profits shrink in the second half of 2022 as higher interest rates and economic pressures reduced the company’s operations.
The real estate firm’s profit in the final quarter of 2022 fell to $81.1 million, down from nearly $692 million in the fourth quarter of 2021. For the full year, the company’s profit fell 23% to $1.4 billion on revenue of $30.8 billion.
CBRE saw a decline in commissions from commercial property sales and leasing transactions. Sulentic expects that the decline in CBRE’s business will be relatively short.
“We think we’re going to have a recession — it’s going to be mild,” he said. “We think in the back half of this year things will start to pick up. And we think we’ll be back to record revenues by 2024.”
CBRE continues to derive revenue from services it provides to companies that outsource their real estate operations.
“All this outsourcing that we’re doing, we expect it to grow by double digits next year,” Sulentic said. “In a downturn, companies really focus on costs and we can save money. They think we can do better and save them money and create a better environment for their people.”
And while commercial real estate sales volume has plunged due to higher interest rates and tightening credit, Sulentic said the market could bounce back quickly when the time is right.
“There’s a wall of capital out there ready to go when clarity comes into the market,” he said. “We think there’s going to be a lot of transactional activity.
“As soon as you see trouble on the horizon, people stop buying and selling things,” Sulentic said. “As soon as they see good news on the horizon, they pick themselves up again.”