After relocating from California to Dallas in 2020, the commercial property firm has a new global head office location.
Dallas-based CBRE Group — the world’s largest real estate service company — is moving its corporate headquarters.
After shifting its head offices to Dallas from California in 2020, CBRE is relocating its executive offices to the Park District building in Uptown Dallas.
The commercial property firm is moving into 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 senior global executives over there in different parts of the business. We think we will be in by late summer or early fall.”
CBRE’s global headquarters is now located in the 2100 McKinney tower, along with the Trammell Crow Co. headquarters and local offices for both companies.
CBRE’s C-suite is taking over 2½ floors of offices that were built out in 2019 for the company’s coworking operation, Hana.
In 2022, CBRE made a 40% investment in shared office firm Industrious, which took over its Hana coworking locations. Industrious has three other Dallas-area locations — including two in downtown.
The Park District coworking facility was recently closed.
“That’s a building that we built and developed,” Sulentic said. “It’s in the part of Dallas we want to be in.”
Park District — which includes an office tower, residential high-rise and retail space — was developed by CBRE’s Trammell Crow Co. and is owned by MetLife.
“We did the investment in Industrious, and this is not one of the buildings that we picked to focus on” for a coworking location, Sulentic said. “We have great space over there — let’s just move the headquarters over there.”
CBRE had originally planned to consolidate its headquarters and local operations in a 27-story office and retail tower to be built at the corner of McKinney and Maple avenues. But the building start got put on hold coming out of the COVID-19 pandemic when office leasing declined.
“We still believe it’s one of the best office sites in America,” Sulentic said. “And that site is going to get 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 give CBRE 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 company,” he said. “We have 500 offices out there. But Dallas is our home officially now. It’s proving to be a good place for us.”
Sulentic said that the headquarters may ultimately wind up in the McKinney Avenue tower when it is built in the future.
Along with other major commercial property firms, CBRE saw its revenues and profits shrink in the second half of 2022 as higher interest rates and economic pressures reduced the company’s business.
The real estate firm’s profit in the final quarter of 2022 fell to $81.1 million, down from almost $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 is anticipating that the slowdown in CBRE’s business will be relatively short.
“We think we are 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 will be back to record earnings by 2024.”
CBRE continues to gain revenues from services it provides to corporations outsourcing their real estate operations.
“All this outsourcing we do we expect that to grow by double digits next year,” Sulentic said. “In a downturn, companies really focus on costs and we can save them money. They think we can do it better and save them money and create a better environment for their people.”
And while commercial property sales volumes have plunged due to higher interest rates and tightening credit, Sulentic said that market could come back quickly when the time is right.
“There is a wall of capital out there ready to go when clarity comes into the market,” he said. “We think there is going to be a lot of transaction activity.
“As soon as you see problems on the horizon, people stop buying and selling stuff,” Sulentic said. “As soon as they see good news on the horizon, they pick up again.”