CBRE Acquisition Expands Valuation Group

LOS ANGELES-CB Richard Ellis Group Inc. has acquired the cost segregation business of Marshall & Stevens Inc., part of a worldwide expansion of CBRE’s valuation services business. The acquisition of Los Angeles-based Marshall & Stevens signals CB Richard Ellis’ entry into the engineering-based cost segregation segment of the valuation services industry, CBRE says.

Engineering-based cost segregation services is a segment of the valuation industry that delays federal tax payments and increases net cash flow for property owners and occupiers by identifying property improvements that are eligible for accelerated depreciation under the federal tax code. Cal Frese, president of the Americas region for CB Richard Ellis, describes the engineering-based cost segregation business in a statement as “complementary with the company’s core sales, leasing, property management and valuation services.”

Doug Haney, president of CBRE’s national valuation and advisory group, will oversee the new cost segregation business, with Chris Hitselberger in New York as the practice leader. The cost segregation practice will be staffed initially by approximately 15 former Marshall & Stevens professionals who will operate from offices in Los Angeles, New York, Chicago, the Northern Virginia/Washington, DC area, Tampa and San Diego.

CBRE plans to expand the cost segregation capability by recruiting additional professionals in the five existing offices and adding specialists in other strategic markets nationwide. The acquisition ofMarshall & Stevens follows CBRE’s recent acquisition of Perth, Australia-based DTZ Australia, one of the largest residential valuation enterprises in Western Australia.

Haney, in a GlobeSt.com report earlier this year, noted that CB Richard Ellis has gradually expanded its valuation business from a small group of appraisers more than 15 years ago to a global practice with more than 600 professionals today. The group posted $202 million in global revenue last year, up 29% from 2004.

Haney pointed out that the valuation business has become more crucial to the dealmaking process. According to Frese, the importance of the valuation practice and the cost-segregation specialty have grown to the point that, “Virtually every property owner and every company that leases space can benefit from cost segregation analysis.”