Other analysts note that commercial real estate service firms are also facing a long-term threat from some of the same technological tools that have recently been boosting their profits. Much of the market information that brokers once controlled is now available over the Internet or through other service providers, putting downward pressure on brokerage commissions even as companies spend millions for new hardware and software.

Indeed, brokerage stocks as a group haven't fared well despite record brokerage revenue and the long stock-market boom on Wall Street. CB Richard Ellis' stock today sells for barely one-third its record $40.38-a-share price in the spring of 1998.

The group that has made the $15.50-a-share offer for CB Richard Ellis is led by Blum Capital Partners LP, a partnership that includes CB Richard Ellis CEO Ray Wirta and Brett White, the company's chairman of the Americas. It also includes the Freeman Spogli & Co. investment firm and Newport Beach based Koll Holding Co.

Koll Holding is run by Orange County real estate tycoon Don Koll, who is also a CB Richard Ellis director.

CB Richard Ellis spokesman Joe Fitzpatrick told GlobeSt.com late Monday that a special committee has been formed to review the bid. "There is no favor one way or the other in terms of the company's position regarding the offer," Fitzpatrick says. The committee "will be retaining their own independent counsel, both financial and legal, and will be representing the interests of the stockholders."

The committee will likely need at least a few weeks to make its recommendation, Fitzpatrick adds. If it approves the deal, "the stockholders will then vote."

The takeover talk at Insignia was prompted by local published reports that Vornado and Insignia officials have been holding preliminary merger discussions. Neither company would comment on the report.

Vornado is already one of biggest property owners in New York and Chicago. But it also has been making more headway out West, grabbing headlines earlier this month by closing a $54-million purchase of the L.A. Mart, a 720,000-sf wholesale furniture and home accessories showroom in Downtown LA.

Insignia ESG has also been stepping up its West Coast presence. Long one of California's biggest property-management firms, it started its own full-service brokerage outfits in the hot Southern California market about a year ago and has already put together some of region's biggest property deals.