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CBRE Crows While G&E Deal Hangs in Balance

NEW YORK CITY-While industry watchers question the wisdom of CB Richard Ellis' ongoing negotiations to acquire Grubb & Ellis, overly zealous CBRE brokers may be monkeywrenching the job their bosses are trying so hard to complete. Sources say the firm's rumor mill has been working overtime following publication last week of an internal memo telling CBRE staff that the deal is in the bag.

By Glen Thompson | Updated on May 22, 2002

NEW YORK CITY-The rampant speculation surrounding the proposed acquisition of Grubb & Ellis by CB Richard Ellis has turned what might have been a manageable meeting of the minds into a negotiators’ nightmare. And while sources close to the deal say the two firms continue to haggle over price, a seemingly uncorkable gush of rumor and misinformation out of the CBRE camp has dealmakers seeing red instead of green.

Despite aggressive repositioning efforts by Grubb & Ellis CEO Barry M. Barovick, the firm was expected to accept a purchase offer from CB Richard Ellis by yesterday. But while G&E has remained silent throughout the talks, industry insiders say the protracted negotiations appear to have taken CBRE by surprise. According to one industry source, “An internal memo went out to all CBRE employees last Thursday announcing the acquisition.” Apparently, the memo fueled enough company-wide exuberance to send brokers straight to their cell phones.

The fallout has been brutal for many G&E brokers, who have been faced with a stream of reports stating that privately held CBRE plans to retain top G&E brokers and relegate the rest of the firm to the scrapheap. Parties involved in the deal have called the situation “ugly,” and more than one insider tells GlobeSt.com that the non-stop gossip has further hindered an already tenuous negotiation process.

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