CB Richard to sell Dell along with other products.
Lee:
I suppose every little bit helps.
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CB Richard Ellis Starts Discount Plan for Products and Services
CB Richard Ellis Starts Discount Plan for Products and Services
Los Angeles, Dec. 10 (Bloomberg) -- CB Richard Ellis Services Inc., one of the world's largest real estate services companies, is starting a new business that offers its clients discounts on everything from office furniture to computers.
The move is an attempt by the Los Angeles-based company to capture a bigger market share amid a wave of consolidation in the property brokerage and management industry.
CB Richard Ellis has formed alliances with more than 20 major companies, such as Staples Inc., Dell Computer Corp., and Xerox Corp., to negotiate purchase agreements that provide ''one- stop shopping'' for its 35,000 tenants and their 1.2 million employees seeking to cut costs on office-related products and services. ''All we're doing is sharpening our pencil,'' said Craig Stevens, senior vice president in charge of the new business, Service Direct Advantage.
CB Richard Ellis, which manages 425 million square feet of space, has used economies of scale to negotiate cut rate prices on a range of services, including long distance calling, bottled water, and fax machines. For example, the company offers tenants and their employees discounts of as much as 50 percent on office supplies from Staples and express mail services from United Parcel Service of America Inc.
CB Richard Ellis isn't alone. Other real estate service companies, such as Cushman & Wakefield Inc. and Trammell Crow Co., provide such services on a more limited basis to single- tenant buildings or building owners.
Acquisition Move
Property management and brokerage companies have been actively acquiring smaller rivals as they seek size to service U.S. corporations around the globe. In the past, real estate services companies limited themselves to building and facilities management, property sales and leasing, and financial services. With U.S. corporations increasingly outsourcing more of their business, these companies have been rushing to offer more sophisticated services. ''It's a cutthroat business,'' Stevens said. ''Service Direct started as a way to distinguish ourselves, but it's growing by the day into a competitive tool.''
Like other real estate services companies, CB Richard Ellis has watched its stock price plunge on concerns that a slowdown in property acquisitions will eat into its earnings. The company's shares, which fell 5/16 to 17 1/2 in late trading, are down more than 45 percent this year.
The new service is being rolled out to tenants across the country after having been tested in markets on the West Coast.
For CB Richard Ellis itself, which has more than $1 billion in annual revenue, the venture will shave up to $5 million off its expenses next year. The new division could generate $15 million in revenue annually if as little as 10 percent of the company's tenant base ordered just office supplies, Stevens said.
The company is developing an online ordering system that will directly link its tenants with vendor partners. |
